An Integrated Company-Wide Management System: Souraj Salah Abdur Rahim

Souraj Salah · Abdur Rahim
An Integrated
Company-Wide
Management
System
Combining Lean Six Sigma with Process
Improvement
An Integrated Company-Wide Management System
Souraj Salah Abdur Rahim
•
An Integrated
Company-Wide Management
System
Combining Lean Six Sigma with Process
Improvement
123
Souraj Salah Abdur Rahim
School of Business and Quantitative Methods,
Quality Management Faculty of Business Administration
HBMS University University of New Brunswick
Dubai, UAE Fredericton, NB, Canada
ISBN 978-3-319-99033-0 ISBN 978-3-319-99034-7 (eBook)

https://doi.org/10.1007/978-3-319-99034-7
Library of Congress Control Number: 2018950965
© Springer Nature Switzerland AG 2019

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The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
To my beloved parents Qasem and Mariam,
my darling wife Majd, my wonderful children
Albara, Bahauddin and Sura, and my dearest
brothers Danial, Muhammad, Anas, Yazeed,
Suhaib and Mosab.
Souraj Salah
To my parents late Azizur Rahman and

Safura Khatun, wife Bilkis Rahim and
children Iftekhar Rahim and Abid Rahim,
grandson Lleyton Rahim, daughter-in-law
Sarah Hillier Rahim.
Abdur Rahim
Preface
Most of the chapters in this book are based on journal and conference papers which
have been published in the past, or either submitted or in preparation. The covered
material is mainly based on published works that are well cited in the literature.
Some sections of the various papers have been removed to avoid repetition.
Part I of this book consists of Chaps. 1–2 which cover the introduction and the
literature review. The main contributions for this book include the enhancement
of the Lean Six Sigma Methodology which is illustrated in Part II which covers
Chaps. 2–6 as well as Part III which covers the Integrated Company-Wide
Management System (ICWMS) illustrated in Chaps. 7–10.
The relationship between Six Sigma and Total Quality Management (TQM) is
discussed in Chap. 3. Chapter 4 discusses the integration of Six Sigma and Lean
Management. Also, Appendix A provides three practical examples for LSS
implementation. Then, Chap. 5 discusses the integration of Six Sigma, Kano model,
Taguchi’s Quality Loss Function (QLF), and Quality Function Deployment (QFD).
Appendix B provides a generic example for implementing Kano-based Six Sigma
model. After that, Chap. 6 examines the implementation of Lean Six Sigma
(LSS) in Supply Chain Management (SCM). Appendix C provides a practical
example for this implementation.
Chapter 7 discusses the integration of Quality Management (QM) and
Continuous Improvement (CI) methodologies with Management Systems (MSs).
Finally, Chaps. 8 and 9 study the components of Integrated Company-Wide
Management System (ICWMS) and how it compares to other Quality Management
Systems (QMSs). Appendix D provides two examples for practical implementation
of ICWMS. The case studies in the Appendices are based on the authors’ work
experiences and involvement in real industries.
Dubai, UAE Souraj Salah

Fredericton, NB, Canada Abdur Rahim
June 2018
vii
Acknowledgements
All thanks are due to God who bestowed upon us his great blessings and generosity.
We are thankful to him for being able to complete this book which we hope to be of
benefit to all mankind prosperity and happiness.
The authors would like to acknowledge the contribution of Prof. Juan Carretero,
Mechanical Engineering Department, University of New Brunswick, Canada, and
thank him for his intellectual guidance and encouragement. The valuable sugges-
tions and directions of Prof. Byung Rae Cho, Professor of the Department of
Industrial Engineering, Clemson University, USA, were very much encouraging.
The editorial and proofreading assistance of Dr. Joseph Abekah, Dr. Bedarul Alam,
Qingzhu Wang, and Kim Wilson of the University of New Brunswick is greatly
appreciated. The financial assistance of the Natural Sciences and Engineering
Research Council (NSERC) of Canada in supporting this collaborative research
project is greatly acknowledged.
The authors are very much indebted to Praveen Anand Sachidanandam, Anthony
Doyle, and Janet Sterritt-Brunner of Springer International Publishing for their
valuable suggestions and interest in publishing the book.
Last but not least, we would like to thank our families for their patience,
understanding, and encouragement. Their faith in us and their love is what moti-
vates us to contribute more to the well-being of all people around us. We are
indebted to all people who have contributed to our effort in different aspects.
The encouragement of our friends everywhere is much appreciated. We would also
like to thank all people from industry who provided us with great support.
ix
Contents
Part I Introduction and Literature Review

1 Introduction and Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1 Introduction and Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 Objectives and Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.3 Book Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2 Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 Six Sigma Improvement Methodology . . . . . . . . . . . . . . . . . . . 7
2.1.1 Design for Six Sigma (DFSS) . . . . . . . . . . . . . . . . . . . . 8
2.2 Quality Management (QM) . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3 Total Quality Management (TQM) . . . . . . . . . . . . . . . . . . . . . . 9
2.4 Lean Improvement Methodology . . . . . . . . . . . . . . . . . . . . . . . 10
2.5 Quality Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6 Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.7 Kano Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.8 Quality Loss Function (QLF) . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.9 Quality Function Deployment (QFD) . . . . . . . . . . . . . . . . . . . . 20
2.10 Supply Chain Management (SCM) . . . . . . . . . . . . . . . . . . . . . . 22
2.11 Company-Wide Quality Control (CWQC) . . . . . . . . . . . . . . . . 26
2.12 Management Systems (MSs) . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.13 Quality Management Systems (QMSs) . . . . . . . . . . . . . . . . . . . 31
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Part II Enhancement of the Six Sigma Methodology

3 Six Sigma and TQM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.2 Comparison and Discussion of Six Sigma and TQM . . . . . . . . . 40
3.3 Summary and Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
xi
xii Contents
4 The Integration of Six Sigma and Lean . . . . . . . . . . . . . . . . . . . . . 49

4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.2 The Integration of Six Sigma and Lean . . . . . . . . . . . . . . . . . . 50
4.3 Benefits of the Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.4 Similarities and Differences of Six Sigma and Lean . . . . . . . . . 57
4.5 Proposed Integrated Model for LSS . . . . . . . . . . . . . . . . . . . . . 68
4.6 Detailed Description of the Integration . . . . . . . . . . . . . . . . . . . 69
4.7 Discussion of Implementation . . . . . . . . . . . . . . . . . . . . . . . . . 75
4.8 LSS and Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
4.9 LSS as an Enabler for Company-Wide
Quality (CWQ) Culture . . . . . . . . . . . . . . . . . . . . . ......... 82
4.10 Summary and Conclusion . . . . . . . . . . . . . . . . . . . ......... 85
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......... 87
5 Kano-Based Six Sigma . . . . . . . . . . . . . . . . . . ................ 95
5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . ................ 95
5.2 Kano-Based Quality Loss Function (QLF) ................ 97
5.3 Examples of Some Integrated Approaches
from the Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
5.4 Integrated Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
5.4.1 Define . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
5.4.2 Measure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
5.4.3 Analyze . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
5.4.4 Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
5.4.5 Verify . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
6 Implementing Lean Six Sigma in Supply Chain Management . . . . 105
6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
6.2 SCM and QM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
6.3 SCM and LSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Part III Integrated Company-Wide Management System (ICWMS)

7 The Integration of QM and CI Methodologies with MSs . . . . . . . . 115
7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
7.2 Gap to Be Bridged by This Integration . . . . . . . . . . . . . . . . . . 116
7.3 Benefits of This Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Contents xiii
8 Integrated Company-Wide Management System (ICWMS) . . . . . . 127

8.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
8.2 Proposed ICWMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
8.3 Components of ICWMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
8.3.1 Strategic Quality Management . . . . . . . . . . . . . . . . . . . 129
8.3.2 Quality Project Management . . . . . . . . . . . . . . . . . . . . . 133
8.3.3 Daily Quality Management . . . . . . . . . . . . . . . . . . . . . . 143
8.3.4 Process Management . . . . . . . . . . . . . . . . . . . . . . . . . . 144
8.3.5 Quality Performance Management . . . . . . . . . . . . . . . . . 148
8.4 Auditing of ICWMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
8.5 A Proposed Framework for ICWMS . . . . . . . . . . . . . . . . . . . . 151
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
9 ICWMS: Comparisons to Other Systems . . . . . . . . . . . . . . . . . . . . 165
9.1 Introduction . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . 165
9.2 Comparisons . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . 165
9.3 Summary and Conclusion . .. . . . . . . . . . . . . . . . . . . . . . . . . . 169
References . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . 174
10 Conclusions and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . 175
10.1 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
10.2 Future Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
Appendix A: LSS Practical Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . 181
Appendix B: Kano-Based Six Sigma Case Study . . . . . . . . . . . . . . . . . . . 203
Appendix C: LSS and SCM Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . 209
Appendix D: ICWMS Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
About the Authors
Dr. Souraj Salah received his B.Sc. in mechanical

engineering specializing in industrial production
engineering from Jordan University of Science and
Technology, Masters of Engineering in mechanical
engineering specializing in industrial engineering
from Concordia University, Montreal (with Great
Distinction), and Ph.D. in mechanical engineering
specializing in industrial engineering management from
the University of New Brunswick where he won the
Graduate Student Merit Award for two times. He is
currently a part-time Adjunct Professor at Hamdan Bin
Mohammed Smart University and also at Abu Dhabi
School of Management (teaching courses like Japanese
quality, quality tools and techniques, TQM fundamen-
tals, and operations management). He also serves as a
Member of the Industrial Engineering Advisory
Committee at the American University of Sharjah,
UAE. He also serves as a member of the advisory
board for the Faculty of Engineering at the University of
Sharjah. He is a full-time Business Process Improvement
Manager working in the logistics, contracting, services,
and manufacturing sectors in the UAE. He worked for
various local, multi-national and fortunate 500
companies across North America and the Middle East.
His main research interests are quality control, Lean, Six
Sigma, TQM, quality culture, operational excellence,
and management systems. He has authored and coau-
thored more than twenty papers which were published in
various international journals and has about twenty years
of industrial engineering experience. He is also certified
as a Six Sigma Master Black Belt and Lean Leader
xv
xvi About the Authors
trained by the Juran Institute, Lead Advisors, Alignment

Strategies in Canada, and Johnson Controls Intl. in the
USA, and as a Quality, Health, Safety, and Environment
Management Systems’ (ISO 9001, ISO 14001, OHSAH
18001) Lead Auditor by Beareau Veritas. He has led and
coached various Green Belt and Black Belt practitioners
in executing hundreds of Lean Six Sigma Projects
delivering tens of millions of dollars in savings from the
Cost-Of-Poor-Quality. In 2015, he won the United Arab
Emirates Quality Professional Award by the American
Society for Quality (ASQ).
Dr. Abdur Rahim is a Professor of Quantitative

Methods, in the Faculty of Business Administration,
University of New Brunswick (UNB), Fredericton,
Canada. He joined the UNB in 1983. He received his B.
Sc. (Honors) and M.Sc. in statistics from the University of
Dhaka, D.S. in operations research from the University
of Rome, M.Sc. in systems theory from the University of
Ottawa, and Ph.D. in industrial engineering from the
University of Windsor. He teaches management science,
operations management, and TQM in the BBA and MBA
programs at UNB. His research interests are quality
control, production, and operations management. Since
1994, he has been an Adjunct Visiting Professor at King
Fahd University of Petroleum and Minerals, Dhahran,
Saudi Arabia. He is a Member of the Editorial Boards for
Economic Quality Control Journal, Journal of Quality in
Maintenance Engineering, Journal of Quality
Engineering and Technology, International Journal of
Six Sigma and Competitive Advantages, and
International Journal of Experimental Design and
Process Optimisation. He also served as a Member
of the Advisory or Editorial Boards for: the American
International University-Bangladesh Journal of Business
Economics, Engineering Optimization Journal,
Quality Engineering Journal, International Journal of
Production Research, and International Journal of
Systems Science. He has authored and coauthored various
research papers in operations research, statistical process
control, production planning, inventory control, mainte-
nance, and TQM in reputed scholarly journals. He has
written or edited several monographs and has produced
over one hundred refereed journal articles or chapters. He
has coedited books on the emerging field of quality
About the Authors xvii
control which were published by Kluwer Academic

Publishers. One presents a broad survey of optimization
in quality control and focuses on industrial and national
competitiveness, while the other focuses on integrated
models in production planning, inventory control, and
warranty analysis and maintenance policy. In recognition
of his performance in research on integrated optimization
modeling in quality control, production planning and
control, inventory control, and maintenance, he has been
awarded continuous funding from Natural Sciences and
Engineering Research Council of Canada (NSERC) since
joining UNB. He has been active in conducting interna-
tional conferences on industrial engineering and opera-
tions management (IEOM) at various parts of the world.
He supervises several master’s and doctoral candidates at
the University of New Brunswick and King Fahd
University of Petroleum and Minerals in Saudi Arabia.
He received the UNB Merit Award in 1992, 2000, 2009,
and 2014 for his performance in research, service, and
teaching. He received the Faculty of Business
Administration’s Excellence in Research Award in
1999 for outstanding performance across his career. He
is a recognized world expert in Total Quality
Management. He has taught a wide range of courses in
various universities. He has worked as a consultant for
United Nations Development Program (UNDP) and Food
and Agriculture Organization (FAO) of the United
Nations. Professor Abdur Rahim and Professor Pradeeb
Banerjee of UNB have the rare distinction of having
mathematical models named after them as they together
developed Rahim–Banerjee Models in statistical process
control.
Abbreviations
5S Sort, Set in order, Shine, Standardize, and Sustain

ABEA Australian Business Excellence Award
AHP Analytic Hierarchy Process
ANOVA Analysis of Variance
AQA Australian Quality Award
ASQ American Society for Quality
BE Business Excellence
BEM Business Excellence Model
BSC Balanced Score Card
CAE Canada Award for Excellence
CCR Critical Customer Requirements
CEO Corporate Executive Officer
CI Continuous Improvement
COPQ Cost-Of-Poor-Quality
COQ Cost-Of-Quality
CRM Customer Relationship Management
CTQ Critical to Quality
CWQC Company-Wide Quality Control
DC Distribution Center
DFSS Design For Six Sigma
DMADV Define, Measure, Analyze, Design, and Verify
DMAEV Define, Measure, Analyze, Enable, and Verify
DMAIC Define, Measure, Analyze, Improve, and Control
DOE Design Of Experiments
DPMO Defects Per Million Opportunities
EDI Electronic Data Interchange
EFQM European Foundation for Quality Model
EPQ Economic Production Quantity
ERP Enterprise Resource Planning
EVOP Evolutionary Optimization
xix
xx Abbreviations
FMEA Failure Mode and Effect Analysis

GE General Electric
HOQ House Of Quality
HRM Human Resource Management
ICWMS Integrated Company-Wide Management System
IDOV Identify, Design, Optimize, and Verify
IMVP International Motor Vehicle Program
ISO International Organization for Standardization
JIT Just-In-Time
KPI Key Performance Indicator
KPIV Key Process Input Variables
KPOV Key Process Output Variables
LSL Lower Specification Limit
LSS Lean Six Sigma
LSSL Lean Six Sigma Light
MBNQA Malcolm Baldrige National Quality Award
MIT Massachusetts Institute of Technology
MS Management System
MSA Measurement System Analysis
N/A Not Applicable
NIST National Institute of Standards and Technology
NQI National Quality Institute
PDCA Plan–Do–Check–Act
PEST Political–Economic–Social–Technological
PO Purchase Order
QC Quality Control
QFD Quality Function Deployment
QI Quality Improvement
QLF Quality Loss Function
QM Quality Management
QMS Quality Management System
QS Quality System
RPN Risk Priority Number
SC Supply Chain
SCM Supply Chain Management
SIPOC Supplier–Input–Process–Output–Customer
SKU Stock Keeping Unit
SMED Single-Minute Exchange of Dies
SPC Statistical Process Control
SWOT Strengths–Weaknesses–Opportunities–Threats
TIPS or TRIZ Theory of Inventive Problem Solving
TPM Total Productive Maintenance
TPS Toyota Production System
TQ Total Quality
TQC Total Quality Control
Abbreviations xxi
TQM Total Quality Management

TSS Traditional Six Sigma
USL Upper Specification Limit
VOC Voice-Of-the-Customer
VSM Value Stream Mapping
List of Figures
Fig. 2.1 Tangible, intangible, and integrated COQ

(Teeravaraprug 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 12
Fig. 2.2 Kano model (Magnusson et al. 2003) . . . . . . . . . . . . . . . . . . . .. 16
Fig. 2.3 Customer expressions correspondence to Kano’s classification
of product features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Fig. 2.4 Step-loss and Taguchi loss functions (Teeravaraprug 2002) . . . . 19
Fig. 2.5 An example of a HOQ as adapted from (Shen et al. 2000) . . . . 21
Fig. 2.6 A Japanese company versus a US company (Sullivan 1986) . . . 22
Fig. 2.7 Integrated SC entities and stages (Antony et al. 2006) . . . . . . . . 23
Fig. 2.8 A generic example of a SC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Fig. 2.9 SC strategic planning process (Foster 2007) . . . . . . . . . . . . . . . . 24
Fig. 2.10 Michael Porter’s value chain as adapted from (Foster 2007) . . . 26
Fig. 2.11 Seven stages of quality (Sullivan 1988) . . . . . . . . . . . . . . . . . . . 29
Fig. 3.1 Integrated framework of TQM, Six Sigma, and other
business blocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 44
Fig. 4.1 Juran’s trilogy as adapted from (Juran and Godfery 1998) . . . .. 50
Fig. 4.2 An example of Six Sigma and Lean common tools . . . . . . . . .. 52
Fig. 4.3 LSS evolution as adapted from (Bevan et al. 2006;
TBM Consulting 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 52
Fig. 4.4 Some LSS models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 54
Fig. 4.5 Lean and Six Sigma phases relationship . . . . . . . . . . . . . . . . . .. 68
Fig. 4.6 LSS and Innovation phases relationship
(Tidd and Bessant 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 82
Fig. 5.1 Customer satisfaction levels . . . . . . . . . . . . . . . . . . . . . . . . . . .. 97
Fig. 5.2 Kano-based Taguchi loss functions as adapted from
(Teeravaraprug 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 98
Fig. 5.3 Integrated model for Kano model-based Six Sigma
(following DFSS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Fig. 5.4 Integrated framework for Kano-based Six Sigma
(following DFSS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
xxiii
xxiv List of Figures
Fig. 7.1 Examples of a company that uses a structured MS

(Company 1) and another that does not (Company 2) . . . . . . . . 121
Fig. 8.1 Basic economic quality level model as adapted from
(Foster 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Fig. 8.2 Strategic quality management . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Fig. 8.3 Quality project management . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Fig. 8.4 A proposed framework or structure for project
selection and prioritization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
Fig. 8.5 Daily quality management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
Fig. 8.6 Process management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
Fig. 8.7 Quality performance management . . . . . . . . . . . . . . . . . . . . . . . . 150
Fig. 8.8 ICWMS components and Deming’s PDCA cycle . . . . . . . . . . . . 153
Fig. 8.9 A high-level structure of ICWMS . . . . . . . . . . . . . . . . . . . . . . . . 154
Fig. 8.10 An integrated framework for ICWMS. Note HSSER stands for
Health, Safety, Security, Environment, and Risk . . . . . . . . . . . . 154
Fig. A.1 Layout improvement before and after switching the storage
locations for Material A and Material B . . . . . . . . . . . . . . . . . . . 184
Fig. A.2 Process capability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Fig. A.3 Individual control chart of daily efficiency . . . . . . . . . . . . . . . . . 188
Fig. A.4 Pareto chart of downtime (DT) categories . . . . . . . . . . . . . . . . . 188
Fig. A.5 Labor sales trend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
Fig. A.6 Labor margin trend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
Fig. A.7 Pie chart of the dollars spent on discounting the labor
margin by reason . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Fig. A.8 Pie chart of dollars spent on discounting the labor
margin by department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Fig. B.1 QFD matrix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
Fig. B.2 A Pareto of the Kano-adjusted importance degree by
customer requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
Fig. B.3 Cause and effect diagram . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
Fig. C.1 Current-state VSM exercise (see soft version for
better visibility) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210
Fig. C.2 Future-state VSM exercise (see soft version for
better visibility) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211
Fig. D.1 ICWMS audit score results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
Fig. D.2 Box plot for the differences between means of 2004 and 2007
survey results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
List of Tables
Table 2.1 Kano evaluation template (Matzler and Hinterhuber 1998) . . . 17

Table 3.1 Similarities and relationship of Six Sigma and TQM . . . . . . . 41
Table 3.2 Differences and relationship of Six Sigma and TQM . . . . . . . 42
Table 4.1 Similarities and relationship between Six Sigma and Lean . . . . 58
Table 4.2 Differences and relationship between Six Sigma and Lean . . . . 59
Table 4.3 Lean methodology understanding as part of the Six Sigma
Black Belt body of knowledge as adapted from
(The American Society for Quality 2008) . . . . . . . . . . . . . . . . 71
Table 4.4 Six Sigma project phase and its applicable Lean tool or
training topic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Table 4.5 Comparison of LSS and Innovation . . . . . . . . . . . . . . . . . . . . 77
Table 4.6 CWQ culture aspects and corresponding LSS practices . . . . . . 84
Table 5.1 Definitions of quality as adapted from (Hassan et al. 2000) . . . . . 96
Table 6.1 Product and service quality dimensions as adapted from
(Foster 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Table 8.1 A partially filled template for a policy deployment matrix as
adapted from (Wallace and Bennett 1994) . . . . . . . . . . . . . . . 132
Table 8.2 Project selection and prioritization matrix . . . . . . . . . . . . . . . . 140
Table 8.3 A template for high-level (tier-1) processes including
core value-chain and value-enabling processes as
adapted from the Process Classification Framework
(PCF) published by the American Productivity and
Quality Centre (2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
Table 8.4 Process maturity evaluation as modified from
(Carnegie Mellon Software Engineering Institute 2002) . . . . . 147
Table 8.5 ICWMS five-level index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
Table 8.6 Deliverables of ICWMS and its components . . . . . . . . . . . . . . 152
Table 8.7 Examples of outcomes from the components of ICWMS . . . . 153
Table 8.8 Comparison of measures results before and after the
implementation of ICWMS (Company A) . . . . . . . . . . . . . . . . 157
xxv
xxvi List of Tables
Table 8.9 Comparison of the BSC absolute results for same KPIs as
well as the survey measures before and after the
implementation of ICWMS (Company B) . . . . . . . . . . . . . . . . 158
Table 9.1 Main practices of ICWMS and other quality and
MS models as adapted from (Kaye and Anderson 1999;
Evans and Lindsay 2002; Jitpaiboon and Rao 2007;
Soltani and Lai 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
Table 9.2 Explanation of the ICWMS practices corresponding to
MBNQA categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
Table 9.3 Explanation of the ICWMS practices corresponding to
Deming’s 14 points . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Table 9.4 A comparison between ICWMS and traditional
MS practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
Table A.1 Initial estimated saving analysis for the project . . . . . . . . . . . . 182
Table A.2 Utilization results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182
Table A.3 An example of layout study results . . . . . . . . . . . . . . . . . . . . . 184
Table A.4 Improvement anticipated results . . . . . . . . . . . . . . . . . . . . . . . 185
Table A.5 Current versus targeted utilization and estimated
saving results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Table A.6 Control plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
Table A.7 SIPOC diagram . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
Table A.8 FMEA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
Table A.9 Data collection and hypotheses information . . . . . . . . . . . . . . 198
Table A.10 Improvement plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201
Table A.11 Employees’ responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 201
Table A.12 Control plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202
Table B.1 SIPOC and CTQ characteristics . . . . . . . . . . . . . . . . . . . . . . . 204
Table B.2 Kano classification of customer requirements . . . . . . . . . . . . . 204
Table B.3 Summary of potential causes for drying process
defects and their weights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
Table B.4 FMEA for the drying process . . . . . . . . . . . . . . . . . . . . . . . . . 207
Table B.5 Summary of key potential sources of problems from the
knowledge tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208
Table B.6 Simple comparison matrix . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208
Table C.1 Implementation action plan (Note SKU stands for Stock
Keeping Unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
Table C.2 Re-buying Kaizen list . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
Table D.1 Comparison of measures results before and after the
implementation of ICWMS and which hypotheses they
support (Company A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
Table D.2 BSC results achieved at Company B out of 200 points
(Note All data for 2008 are as of September 6, 2008). . . . . . . 225
List of Tables xxvii
Table D.3 Comparison of the BSC absolute results for same KPIs
before and after the implementation of ICWMS and which
hypotheses they support (Company B) . . . . . . . . . . . . . . . . . . 225
Table D.4 Summary of detailed survey measures and which hypothesis
they support (Company B) . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
Table D.5 Paired t-test results for means of 2004 and 2007 survey
results (by Minitab) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
Table D.6 ICWMS audit score result . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
Abstract
Industries are continuously facing a fierce competition and a global challenge of

meeting an increasing demand for higher-quality products at economic costs. The
success of an organization is directly related to how effective its implementation of
Continuous Improvement (CI) methodologies is. There is a genuine need for more
research in this area. This book consists of the following interrelated concepts and
problems of economic importance and its practical engineering value.
The Six Sigma Methodology is a well-disciplined and structured approach used
to enhance process performance and achieve high levels of quality. Total Quality
Management (TQM) has been a dominant management concept for CI utilizing
Deming’s basic concepts of Plan–Do–Check–Act (PDCA). Another state-of-the-art
CI methodology is Lean which is proven to help organizations achieve on-time
delivery of the right quality and quantity. Also, Kano model, Supply Chain
Management (SCM), Taguchi’s Quality Loss Function (QLF), and Quality
Function Deployment (QFD) are all important approaches for Quality Improvement
(QI). Six Sigma and these improvement approaches share the same goals of cus-
tomer satisfaction and Business Excellence (BE). However, each has its own
strengths. Management Systems (MSs) are ways to manage a business which are
developed to meet the requirements of Quality Management (QM), health, safety,
security, financial management, etc. Recently, different MSs have gained more
attention as they form a critical infrastructure for improving and controlling the
different operation systems of an organization. As such, studies on integrating Six
Sigma with other methodologies such as TQM, Lean, Kano model, SCM as well as
other MSs are worth investigating through various proposed models and practical
examples.
Typically, CI methodologies are implemented without being properly integrated
to MSs. As a result, numerous studies pointed out that most implementation efforts
of CI methodologies have failed. The framework for formulating and modeling
such an integration is presented through the proposed Integrated Company-Wide
Management System (ICWMS) which has been developed as part of this book. In
addition, the proposed ICWMS is implemented and evaluated through two actual
case studies at real Companies A and B. The case studies help demonstrate and
xxix
xxx Abstract
prove how effective this integration is, qualitatively and quantitatively through a
few years comparison of both a preapplication status and a post-application status.
ICWMS has benefits such as enhancing performance, communication, profit,
productivity, quality, society satisfaction, strategic alignment, cost reduction,
resources optimization, employee motivation, and improvement rates. The results
of the implementation in Company A showed improvements such as the 20%
improvement in the Balanced Score Card (BSC) Key Performance Indicators
(KPIs) results, the turning of the financial situation from being non-profitable in the
order of hundreds of thousands of dollars into becoming profitable in the order of
millions of dollars, 67% improvement in regional market share, 21% improvement
in gross margin, 20% improvement in productivity, 13% improvement in customer
satisfaction, and 36% improvement in the employee survey results. The results
of the implementation in Company B showed improvements such as the 23%
improvement in the BSC KPIs results, 15% improvement in the employee survey
results, 10% improvement in flexible budget, 30% improvement in the internal
rejects, and 182% improvement in people recordable safety incident rate.
Part I
Introduction and Literature Review
Chapter 1
Introduction and Overview
Abstract This book investigates the integration of Six Sigma with other
improvement approaches such as Total Quality Management (TQM), Lean, Kano
model, Quality Function Deployment (QFD), Taguchi’s Quality Loss Function
(QLF), Supply Chain Management (SCM) as well as other Management Systems
(MSs). It also investigates the development, implementation, and evaluation of the
proposed Integrated Company-Wide Management System (ICWMS) which
includes Six Sigma to achieve strategic alignment, customer satisfaction, resources
optimization, and effective Continuous Improvement (CI) of quality and perfor-
mance so that all stakeholders are delighted.

Keywords Total Quality Management (TQM) Lean Six Sigma
Integrated Company-Wide Management System (ICWMS) Continuous
Improvement (CI)
1.1 Introduction and Motivation
Many industrial organizations today are not realizing the potential of CI method-
ologies integrated together along with a proper comprehensive MS. There are
several cases of failure in implementing improvement projects and maintaining their
benefits resulting in tremendous waste of energy, resources and in some cases, the
closure of industrial facilities that are unable to cope with the increasing global
pressure of competition.
The success is likely to be in the proper integration of various components to
achieve the goal of strategic alignment, customer satisfaction, and resources opti-
mization, leading to optimal quality, productivity, and efficiency which is expected
to make a significant contribution to all stakeholders and the society at large. Only
few researchers have started looking into this topic, and they are still scratching the
surface. This proposed effort has extended previous works and considered a wider
and more comprehensive scope.
© Springer Nature Switzerland AG 2019 3

S. Salah and A. Rahim, An Integrated Company-Wide Management System,
https://doi.org/10.1007/978-3-319-99034-7_1
4 1 Introduction and Overview
1.2 Objectives and Contributions
The objectives of this book are:

• To rationalize that the integration of Six Sigma and TQM is possible and
beneficial.
• To propose how Six Sigma and TQM can be integrated.
• To rationalize that the integration of Six Sigma and Lean is possible and
beneficial.
• To propose how Six Sigma and Lean can be integrated in theory and in practice
using three practical case studies.
• To present a model for selecting the proper projects of the highest priority.
• To rationalize that the integration of Six Sigma, Kano model, Taguchi’s QLF,
QFD, and other improvement tools is possible and beneficial.
• To propose how Six Sigma, Kano model, Taguchi’s QLF, QFD, and other
improvement tools can be integrated in theory and through a generic case study.
• To rationalize that the integration of Lean Six Sigma (LSS) and SCM is possible
and beneficial.
• To propose how LSS can be implemented in SCM in theory and using a
practical case study.
• To rationalize that the integration of QM and CI methodologies with MSs is
possible and beneficial.
• To build a holistic framework for the proposed ICWMS that can be used by any
organization (manufacturing or service) to achieve strategic alignment, re-
sources optimization, and performance improvement.
• To demonstrate the proposed ICWMS framework through two case studies
which help evaluate its effectiveness.
1.3 Book Organization
This book is organized as follows. In the next chapter, a literature review is con-
ducted including several topics such as Six Sigma, TQM, Lean, Kano model, QFD,
Taguchi’s QLF, SCM, and MSs. Chapter 3 discusses the integration of Six Sigma
and TQM. After that, Chap. 4 provides a detailed description of the integration of
Six Sigma and Lean. Then, Chap. 5 investigates the integration of Six Sigma with
QFD, Kano model, Taguchi’s QLF, and other improvement approaches. Chapter 6
discusses the implementation LSS in SCM.
Chapter 7 introduces the integration of Quality Management (QM) and CI
methodologies with MSs. Chapter 7 also describes some of the foundations needed
for successful deployment of CI methodologies and the benefit of developing this
proposed model. Chapter 8 presents an idea of what ICWMS looks like, its
structure, its tools, and components, and how they interact with each other. Also,
Chap. 8 provides a detailed description of how this ICWMS can be implemented.
1.3 Book Organization 5
This includes the proposal of a new model for CI projects selection and prioriti-
zation as well as a discussion of culture change management considerations and
ICWMS culture.
Chapter 9 provides a discussion on the comparison of ICWMS with other
management and Quality System (QS) models. Chapter 10 provides summary and
conclusions of the topics covered in this book. Appendices A, B, and C provide
three real LSS case studies, a Kano-based Six Sigma, generic case study, and
another actual case study on the implementation of LSS in SCM, respectively.
Finally, Appendix D describes the implementation of ICWMS through two case
studies at real industries to verify the proposed model quantitatively and qualita-
tively. Actual studies of real companies in the Appendices are based on the authors’
own actual work involvement in implementation.
Chapter 2
Literature Review
Abstract This chapter provides a comprehensive literature review of various

topics which are relevant to quality improvement approaches and management
systems. It provides a basic understanding of these topics which eventually can be
utilized in demonstrating how integration of these approaches and systems can be
achieved.

Keywords Total Quality Management (TQM) Lean Six Sigma

Quality Management Systems (QMSs) Integrated Company-Wide Management

System (ICWMS) Supply Chain Management (SCM) Quality Loss Function

(QLF) Quality Function Deployment (QFD) Innovation
2.1 Six Sigma Improvement Methodology
The highly competitive market people live in today has forced companies to look
for ways to improve their processes in order to gain an advantage over their
competitors. Six Sigma is a structured approach used to achieve low levels of
variability. Six Sigma quality means only two defects exist per billion opportunities
(or 3.4 defects per million in the long term). The necessity to operate at such a low
level of defects may not always be economic. Most companies operate at a three-r
level, i.e., 2.7 defects per one thousand (Kwak and Anbari 2004); however, at
high-yield companies producing parts each with thousands of opportunities of
failure, achieving a defect-free level is necessary.
Motorola’s Six Sigma Quality Program was created by B. Smith in 1987
(Devane 2004). Also, W. Smith (Kumar et al. 2007) and Harry (Harry and
Schroeder 2000) participated in the development of the concepts of Six Sigma.
Motorola created six steps to achieve Six Sigma, which were later replaced by the
four phases of measure, analyze, improve, and control of General Electric (GE).
After that, the define phase was added before the measure phase to form the
well-known DMAIC process, i.e., Define, Measure, Analyze, Improve, and

https://doi.org/10.1007/978-3-319-99034-7_2
8 2 Literature Review
Control. DMAIC may be regarded as a short version of the Deming cycle, i.e.,
Plan–Do–Check–Act or PDCA (Dahlgaard and Dahlgaard-Park 2006). Six Sigma
measures the process capability in order to produce defect-free products and utilizes
DMAIC to move to a revised process (Chen and Lyu 2009).
The Six Sigma approach starts with the identification of the need for an
improvement initiative. In the Define phase, the problem and the goal of the project
are chartered and an analysis is performed to quantify its Cost-Of-Poor-Quality
(COPQ), as well as its expected financial savings. The baseline performance is
studied in the Measure phase, and brainstorming is performed to identify the list of
the potential process inputs. These inputs are then investigated in the Analyze phase
to verify the critical few inputs negatively affecting the process output. In the
Improve phase, the critical inputs are studied to determine the solutions. Lastly, in
the Control phase, the focus is on monitoring the inputs and/or outputs of the
improved processes on a day-to-day basis to ensure that the anticipated gains are
maintained.
2.1.1 Design for Six Sigma (DFSS)
DMAIC is the term used to describe the phases of the approach taken in a Six
Sigma project to achieve CI. It is used when the product or process already exists
but is failing to meet customer requirements (Banuelas and Antony 2003). On the
other hand, if the product or service taken into account is under major design
change requirements or still at the early stages of development, DFSS (Design For
Six Sigma) approach is used and the five phases that are used become DMADV
(Define, Measure, Analyze, Design, and Verify) or IDOV (Identify, Design,
Optimize, and Verify). The goal of DMADV is to strive to achieve a Six
Sigma-level right from the early design stage, and it generally applies the principles
of concurrent engineering. According to Harry and Schroeder (2000), organizations
that implemented Six Sigma and achieved five-Sigma levels (i.e., 233 defects per
million opportunities or DPMO) need to implement DFSS to exceed those levels.
They have also indicated that IDOV helps create stable, reliable, efficient, and
satisfying products. Banuelas and Antony (2004) have mentioned that DMAIC is
concerned with CI, whereas DMADV is concerned with continuous innovation.
DFSS is a structured methodology based on analytical tools to predict and
prevent defects in the product design. It is used to make a reliable and defect-free
new product and thus increase profits. It passes through five phases: Define the
design problem and customer requirements, measure the Critical-To-Quality (CTQ)
characteristics, analyze the high-level technical design requirements to meet the
customer’s needs, develop the optimized design in detail, and verify the design
performance in satisfying customers.
2.2 Quality Management (QM) 9
2.2 Quality Management (QM)
Quality Management (QM) encompasses Quality Improvement (QI) which is about

improving process efficiency and effectiveness (Nanda 2005). QM evolved through
different stages in the last several decades, such as inspection, control, assurance,
TQM (Mangelsdorf 1999; Basu 2004), and CI (Kaye and Anderson 1999). QM is
claimed to be a new management theory which evolved into TQM, Six Sigma, and
other forms (Anderson et al. 2006). Basu (2004) viewed the new evolving CI
methodologies as being embedded in holistic programs of operational excellence
and QM which need tools and techniques.
Organizational excellence is a result of building quality into people, partnership,
processes, and products (Dahlgaard and Dahlgaard-Park 2006). QM can be seen as
a holistic approach to company-wide quality operated through leadership, man-
agement structure, quality tools, supplier support, customer focus, process man-
agement, learning, employee fulfillment and focus, teamwork, and CI
(Mellat-Parasat and Digman 2007). An important factor for organizational excel-
lence is the successful management of three variants of QM: compliance,
improvement, and business management (Burcher et al. 2008).
The ultimate target of QM is to set up a MS and a culture which ensure
organization-wide quality, CI, leadership, employee fulfillment, customer focus,
human focus, management structure, quality tools, supplier support, and teamwork.
Despite that QM has different organization assumptions than management theory,
there is a high importance for QM in management research (Mellat-Parasat and
Digman 2007).
2.3 Total Quality Management (TQM)
TQM has been a dominant management concept for CI utilizing Deming’s basic
concepts of PDCA. TQM can be defined as a Quality Management System (QMS)
or a corporate culture continuously evolving and consisting of values and tools
which focus on customer satisfaction and the use of fewer resources (Anderson
et al. 2006). Short and Rahim (1995) viewed TQM as a philosophy used by
organizations to drive CI across their business activities. There are seven quality
tools and seven management tools frequently mentioned in the TQM literature
(Arnheiter and Maleyeff 2005). The seven quality tools are control charts, his-
tograms, check sheets, scatter plots, cause and effect diagrams, flowcharts, and
Pareto charts. The seven management tools are affinity diagrams, interrelationship
diagraphs, tree diagrams, matrix diagrams, prioritization matrices, process decision
program charts, and activity network diagrams.
2.4 Lean Improvement Methodology
Lean is a methodology that is used to eliminate waste, variation (any activity that
deviates from a standard), and work imbalance. According to Anderson et al.
(2006), the National Institute of Standards and Technology (NIST) defines Lean as
a systematic way to eliminate waste by pulling products from the supplier when
required to achieve CI.
In general, there are three types of activities in any work environment: waste and
secondary and value-adding activities. Waste is any activity unnecessary to meet
the needs of the customer (consuming time or resources). Secondary work is any
activity that does not add value but is currently necessary due to the limitations of
the process. Value-adding work is any activity transforming the product or service
that a customer, if given the choice, is willing to pay for. The Lean solution for the
value-adding activity is to streamline it, for the wasteful activity is to eliminate it,
and for the secondary activity is to streamline it in the short term and eliminate it in
the long term. Also, Lean is unique in a way as it focuses on enabling people to see
things from the perspectives of the customer, the product or service, and the whole
value stream.
The term ‘flow’ in production was first used by Ford in the early 1900s. In the
1940s, the Toyota Production System (TPS) came into existence. It was based on
the idea of production material flowing like a water stream to reach customers.
Anything preventing the material from flowing is a waste. According to Holweg
(2007), the TPS was developed by Ohno to become the first Lean manufacturing
system based on ideas from the West, including Ford’s production techniques, and
the good expertise of his Japanese teachers. He did lots of experimentation to come
up with TPS which has been evolving through the years. It became known initially
in the West as Just-In-Time (JIT) (Reichhart and Holweg 2007). In the late 1980s,
the generic term ‘Lean’ was made popular by the International Motor Vehicle
Program (IMVP) researchers of the Massachusetts Institute of Technology (MIT)
(Devane 2004).
Lean is simply based on five principles as identified by Womack and Jones
(Hines et al. 2004; Bendell 2006): Understand what customers value, map the value
stream of all activities from raw material to delivery, make the value flow by
striving for continuous one-piece flow, pull products from suppliers JIT for use, and
seek perfection by CI.
2.5 Quality Costs
The concept of Cost-Of-Quality (COQ) was developed based on the works by

Juran, Feigenbaum, and Freeman; it was later popularized by Crosby’s publication
of Quality is free (Han and Lee 2002). According to Ishikawa (1985), knowing cost
is important in order to define quality. Most accounting systems are not designed to
2.5 Quality Costs 11
identify quality costs and revenues related to product and process QIs (Kolarik
1995). Quality costs and revenues are important for developing effective QSs and
effective strategic financial goals (Teeravaraprug 2004).
The objectives for quantifying the COQ include (Juran 1988): to present quality
projects and programs in a language understood by top management, to identify and
prioritize cost reduction opportunities, to identify product stability threats and
customer satisfaction opportunities, to expand budget and cost controls, and to
stimulate improvement. COQ is important because it typically accounts for 10–25%
of sales turnover and some companies have been able to achieve up to 80%
reduction in their quality costs in as little as four years (Dowd 1988).
Quality must be defined from the perspective of the whole system of product
manufacturing and use, not local accounting perspectives. This includes costs of
rework, scrap, and loss of productivity because of inefficiencies due to variation
such as excess inventory and processing, maintenance, downtime, and waste of
time (Gunter 1988).
Taguchi developed a philosophy and a methodology for quality and process
improvement that heavily used statistical experiments. From the view of his con-
ceptual framework for QI, his ideas can be condensed into two concepts (Gunter
1988):
1. Quality losses must be defined as a deviation from target and measured
system-wide (loss to society), not conformance to specifications measured by
local costs. Quality deteriorates as the product deviates from the targeted design
and rework or scrap costs increase as the product flows through the manufac-
turing system.
2. Quality must be designed in so that high system quality levels are achieved
economically. There are three stages for quality by design: systems (functional),
parameter (targeting), and allowance (tolerance) designs. The first two have the
greatest opportunity for reduction of quality costs, while the third often includes
cost increase.
All businesses use financial controls to compare their actual and budgeted costs.
In the 1950s, companies started evaluating the cost of their quality. This is
important because: the COQ increased due to increases in products complexity,
people’s awareness of the life cycle costs increased (including maintenance, labor,
spare parts, and field failures), and there was a need to communicate COQ using the
language of management (i.e., money). Quality costs are costs related to producing,
identifying, avoiding, and repairing defective products. Quality costs include four
categories (Montgomery 2001):
1. Prevention costs include costs of quality design and engineering efforts done to
prevent defects through the planning of quality and its related communication
procedures, inspection, reliability, data systems, quality assurance, and audits.
2. Appraisal costs include costs of measuring and auditing of products to ensure

their conformance to quality specifications. It also includes instruments’ cali-
bration costs.
3. Internal failure costs result from failure prior to delivery such as scrap and
downtime.
4. External failure costs result from failures after delivery such as warrantee cost.
Teeravaraprug (2004) indicated that considering both tangible quality costs
(prevention, appraisal, internal and external failure costs) and intangible quality
costs (such as the loss to society estimated by QLFs and the loss due to low
productivity which may be caused by operator’s anxiety) leads to a more accurate
decision on optimum level of quality. Prevention and appraisal costs are considered
as the cost of good quality (which is low at low levels of quality as shown in
Fig. 2.1a), whereas the internal and external are the COPQ (which is high at low
levels of quality).
There are numerous cases where quality costs are very difficult to quantify in
monetary scale as in the case of partial operator time being freed-up for other tasks
as a result of QI. This is sometimes referred to as ‘soft savings.’ Figure 2.1b shows
that the loss to society decreases when the quality level improves. It is generally
acceptable to say that loss due to productivity is proportional to anxiety.
Teeravaraprug (2004) proposed using a linear relationship between anxiety and
productivity (Fig. 2.1c). It shows that high anxiety (resulting in low quality level
and productivity) gives high loss. Lastly, Fig. 2.1d shows the total tangible and
intangible quality costs curve. After considering intangible costs, more accurate
decisions can be made on the optimum quality level.
Fig. 2.1 Tangible, intangible, and integrated COQ (Teeravaraprug 2004)

2.6 Innovation 13
2.6 Innovation
Innovation is a change that starts with creativity which is the ability to generate
radically different and useful ideas. Organizational creativity depends on the way of
interaction and behavior of its individuals. Invention is the creation of new or
different combination of needs and means, and it is the first step in innovation. The
Inventor is not necessarily an entrepreneur since the invention requires resources
and expertise. Not all people are inventors but any one may come up with an idea
where various people may collaborate and take it into effective use via full cycle of
innovation methodology. For example, in 1907, Spangler who was a janitor sold his
vacuum invention to Hoover (Tidd and Besant 2013).
The word ‘innovate’ is derived from the Latin word, ‘innovare,’ which means:
‘to make something new.’ Innovation is to bring, develop, and exploit a new
creative idea, opportunity, solution, process, technology, position, view, market,
paradigm, or mental model, to a widespread, practical, and effective use by
designing, manufacturing, managing, forming a new organization, opening a new
market, or launching a new product or service (Tidd and Besant 2013).
Innovation is about empathy through which organizations can out-think their
competitors. It is about tapping into the most recent trends that are changing cus-
tomers behaviors. It is also a significant driver of organizational growth and
profitability. Ingenious products, services, solutions, and processes create new
value and exceptional customer experiences. Innovation is a key enabler for any
organization to exceed customers increasing expectations. It is about new ideas
which may have not existed in the past or a new application of an existing idea. The
idea can be very simple, but its strength might be in the collaboration of teams to
take it and build up on it, so as to come up with a creative solution. It is about
cooperative competition or what is sometimes called competition. A key consid-
eration in innovation is to put one’s self in the place of the customer, or watching
the customer using a service or a product: What do they think? How do they feel?
What difficulties do they face? What do they prefer? How to make their experience
delighting?
Innovation requires new values, flexible culture, infrastructure, and tools. It
requires training of employees on creativity techniques so that they challenge
absolutes, understand the needs, harness trends, leverage resources, use metaphors,
reverse approach, change perspective, look for alternatives, modify, synthesize, and
adapt.
Innovation is much more than science as scientific discoveries predate com-
mercial products. It is difficult to find a consistent definition or understanding of
innovation (Ng 2009). According to Ng (2004), innovation is an everyday
engagement and not accidental happening. Here are some definitions of innovation
from the literature:
• Innovation is a strategy used by companies to deliver value to customers (Ng
2009).
• Innovation is the intentional introduction of significantly beneficial ideas, pro-

cesses, products, or procedures within an organization (West and Farr 1990).
• It is the ‘successful implementation of creative ideas within an organization’
(Amabile 1998).
• According to McAdam et al. (1998), innovation is the process of realizing new
ideas which are made attractive to customers. It is the continuous renewal of
quality by all employees.
There are two common types of innovation:
• Incremental or continuous enhancements to existing technologies: It is about
doing what is regularly done, but better, for example, the introduction of Sony
Walkman based on the fading and basic handy tape-recording device and the
addition of head phones.
• Radical or discontinuous enhancements which transform the way someone
thinks or uses a product: It is about doing what someone does, but differently or
by changing the rules of the game. It is about the enhancements to new tech-
nologies causing dramatic shifts (Tushman and Anderson 2004). An example of
it is the introduction of ‘iPods’ which replaced compact disk (CD) players and
transformed the music industry. It is much more difficult to bring a structured
approach to a non-structured one of radical innovation.
Also, another classification for innovation is the incremental or architectural
system innovation versus component innovation. Innovation pattern starts with a
highly uncertain phase with open possibilities until later stages of gradual maturity
and focus on the incremental innovation, as described in Abernathy and Utterback’s
model (Tidd and Bessant 2013), as follows:
1. A fluid phase including experimentation, exploration, uncertainty, and flexibility
which are about changing the rules of the game by new technology or new
market, etc. This is called creative, destructive, disruptive, or discontinuous
innovation with an accelerated effect of improvement.
2. A transitional phase including dominant design, outside which it is difficult to
explore, with room mainly for imitation and development.
3. A specific phase including standardization and integration, moving from radical
to incremental innovation, focusing on cost, reliability, quality, productivity,
and functionality. Innovation is a continuous cycle as disruption happens again
to start a new cycle. As some products reach maturity in the market, no new
investment into those products may bring favorable return. This motivates the
new wave of innovation to happen, but it may still happen anytime.
According to (Francis and Bessant 2005), innovation scope has four Ps which
are product, process, paradigm, and positioning. Rothwell (1994) came up with five
generations’ framework for chronological development of innovation. Additionally,
there are two Innovation Process Models (Tidd and Bessant 2013):
2.6 Innovation 15
A. An Innovation Process Model under steady-state conditions (repeated, contin-

uous, incremental, well-defined space or scope):
• Search or find opportunities for change: legal, market, technology, com-
petitor actions, etc.
• Select what to do and why: Inputs include signals about possible opportu-
nities, current knowledge base in the firm but may seek external expertise,
and the fit to its strategy.
• Implement: Acquire the knowledge, commit, execute under uncertain con-
ditions or unexpected difficulties, sustain, finalize, feedback, check, and act
while anticipating market friction.
• Capture: Get the benefits (commercial market share and cost improvement),
change the world as in social innovation, get patency or license, and obtain
complementary assets which are hard for others to duplicate.
B. An Innovation Process Model under unsteady-state conditions which are
harder to define and learn as innovation happens occasionally and radically
under discontinuous state or not well-defined space or scope. This model needs
different set of routines, tolerance for uncertainty, flexibility, and learning
through failure, in addition to the ones developed during steady-state conditions
model.
2.7 Kano Model
Developed by Kano et al. (1984), the Kano model is an effective technique used to
obtain a profound understanding of customer needs. It is a well-established
psychology-based method used to satisfy customers. It is also a two-dimensional
quality model which explains that the relationship between customer satisfaction
and functionality or performance is not necessarily linear. Product performance
refers to the efficiency with which a product achieves its intended purpose (Foster
2007). Kano model enables a creative understanding of customer needs and which
ones are more critical to satisfaction. It is used to deeply analyze the
Voice-Of-the-Customer (VOC). It is an intellectual model which provides a sys-
tematic approach to understand customer needs (Shen et al. 2000). It has been
applied to new product development (Matzler and Hinterhuber 1998) as well as new
service creation (Bhattachrayya and Rahman 2004). Kano et al. (1984) classified
product characteristics into three types (Figs. 2.2 and 2.3):
a. Must-be attributes (expected): These are expected by customers to exist in the
product, and their absence leads to much dissatisfaction. An example of that
(Teeravaraprug 2002) is when a customer does not ask for a car that is safe to
drive.
Fig. 2.2 Kano model (Magnusson et al. 2003)
Fig. 2.3 Customer

expressions correspondence
to Kano’s classification of
product features
b. One-dimensional attributes (proportional): The existence of these attributes

creates satisfaction, and the better they are, the more satisfied customers
become. An example of that (Teeravaraprug 2002) is when customers specify
the need for an economic vehicle. The existence of this requirement will satisfy
the customers, and the more it matches with their expectations, the more sat-
isfied they become. However, if the vehicle is not economic, the customers
become dissatisfied. The diagonal line in Fig. 2.2 corresponds to the explicit and
spoken customer requirements. According to Li (2003), Kano claimed that the
impact of different product (or service) elements have different effects on cus-
tomer contentment and should not be used in the same way. Thus, in addition to
measuring the order of importance of various product (or service) elements, it is
important to measure the different effects on customer satisfaction.
2.7 Kano Model 17
c. Attractive attributes (value-adding): The addition of these attributes delights

customer, whereas their absence may not cause dissatisfaction. An example of
that (ReVelle et al. 1998) are minivans that have stereo and headphone jacks for
the kids.
The must-be and the attractive attributes are thought of as unspoken or
unspecified attributes unless violated, unlike the one-dimensional attributes
which are specified. However, there are situations where three other categories
may result (Kano et al. 1984).
d. Indifferent: These occur if customers are unconcerned whether they exist or not.
e. Reverse: These occur when customers expect the absence or the reverse.
f. Skeptical or questionable: These occur if a customer gives a conflicting
response.
It is recommended to fulfill all must-be attributes (priority), be competitive on
the one-dimensional attributes and then include some of the attractive attributes
(CQM 1993; Robertshaw 1995). Kano model helps in understanding the unspoken
needs of customers (Magnusson et al. 2003). Customer needs are dynamic, and
what is currently attractive may become a priority in the near future. The Kano
questionnaire helps practitioners in the classification of customer needs (Table 2.1).
It is based on a pair of a negative and a positive questions with multiple choices for
each.
Kano model has the following advantages: It provides a better understanding of
customer requirements and a better tailoring of solutions to optimally satisfy dif-
ferent customer segments, it helps in requirements’ trade-off decisions, it helps in
the fulfillment of the attractive and differentiating requirements, and in creating an
optimal prerequisite for QFD (Matzler and Hinterhuber 1998). Also, it requires little
Table 2.1 Kano evaluation template (Matzler and Hinterhuber 1998)

Dysfunctional form of the question
Functional 1. Like it 2. Must 3. Neutral 4. Can 5. Dislike it that
form of the that way be that live with way
question way that
1. Like it Questionable Attractive Attractive Attractive One-dimensional
that way
2. Must Reverse Indifferent Indifferent Indifferent Must-be
be that
way
3. Neutral Reverse Indifferent Indifferent Indifferent Must-be
4. Can Reverse Indifferent Indifferent Indifferent Must-be
live with
that
5. Dislike Reverse Reverse Reverse Reverse Questionable
it that
way
mathematical computation and the relevant information can be easily obtained

(Lee et al. 2008).
Customer needs are different, and the improvement in one may not grant the
same satisfaction as in another one. That is why weighing them is important.
However, the traditional weighing methods may not be sufficient to illustrate the
relationship between needs and satisfaction. Kano model classifies the influences of
the needs on customer satisfaction. Thus, it is a very effective tool that can be used
in needs prioritization by setting up some importance ranks of individual product
characteristics in multiple-criteria decision-making to optimize the product devel-
opment process by readjusting the conventional raw weights focusing on customer
satisfaction (Chen and Chaung 2008).
Kano model is criticized for providing limited decision support in engineering
design (it does not classify requirements that are within the same category),
focusing on the customer view with limited consideration of the manufacturer’s
capacity (to make and afford, the value chain converges when the two overlap), and
for not being equipped with quantitative assessment of customer needs (Xu et al.
2009). It lacks the consideration of human uncertainty and the fuzzy thinking
patterns of customers (Lee and Huang 2008).
2.8 Quality Loss Function (QLF)
Quality of products and processes is a critical success factor in manufacturing. The

selection of a QLF is an important issue in quality engineering to relate the pro-
duct’s key quality characteristics to its quality performance. QLF depends on
customer specifications, and it quantifies the quality loss on an economic scale. It
includes costs incurred during production and use. It recognizes the needs of
producers and customers. Both variance and bias must be reduced in order to
minimize the quality loss of a product. The exact QLF form is unknown
(Teeravaraprug 2004). Different QLFs have been discussed in the literature
(DeGroot 1970; Taguchi and Wu 1980; Taguchi 1986; Spiring 1993; Drain and
Gough 1996; Li 2003). However, a simple quadratic QLF may be reasonable in
many cases (Taguchi et al. 1989; Teeravaraprug and Cho 2002). The approach for
improving quality depends on the QLF type (Teeravaraprug 2002).
The simplest form of QLFs is the traditional step-loss function. If the product
quality characteristic y falls between the USL and the LSL, the customer is satisfied.
If y falls outside the limits, the customer is dissatisfied. This QLF is described in
(2.1) as:
Lð yÞ ¼ 0 if USL y LSL; R otherwise ð2:1Þ
where L(y) is the quality cost related to the characteristic y, and R is the cost of
rejecting a defect. Figure 2.4a shows the step-loss function. However, the step-loss
function may not reflect the customer perception of quality in the best manner since
2.8 Quality Loss Function (QLF) 19
Fig. 2.4 Step-loss and

Taguchi loss functions
(Teeravaraprug 2002)
there might be a slight difference in a characteristic between an accepted product

and a rejected one. To overcome this issue, Taguchi’s QLF is used (Teeravaraprug
2002).
Clausing (1984) defined quality loss in terms of a QLF as the financial cost
imparted by the society after the product is shipped including the internal costs. It is
quantified in dollars and linked to quantifiable product characteristics and hard
technology. To merely measure quality in terms of meeting specifications is a poor
method as there could be better products that meet the same specification with less
cost to society. To define the quality loss, Taguchi proposed a QLF in the form of a
quadratic relationship which unites the financial loss with the functional specifi-
cation. Taguchi’s QLF represents a cost-oriented element of Company-Wide
Quality Control (CWQC) (Sect. 2.10). His QLF changed the way people think
about quality and the funding of QI (Sullivan 1988). Taguchi’s function has three
models: The smaller the better where the zero is assumed to be the best target value,
the larger the better which assumes some larger value as the target, and nominal the
best where a deviation from the target value in any direction is treated the same.
Examples of the ‘smaller the better’ are deterioration, wear, noise level, and
shrinkage. Examples of the ‘larger the better’ are strength of materials, life of a
system, and fuel efficiency (Teeravaraprug 2004). These loss functions are as
follows:
L ¼ k ð yÞ2 if smaller the better ð2:2Þ
L ¼ k=ð yÞ2 if larger the better ð2:3Þ
L ¼ k ðy T Þ2 if nominal the best ð2:4Þ
where L is the ‘loss to society’ due to deviating from the nominal target value T, y is
the quality characteristic measurement which represents product or process per-
formance, and k is a company-specific and composite cost constant (loss coefficient)
that depends on the internal costs, warranty costs, field costs, costs to customers,
and the cost to society. Determining the cost to customers and cost to society
require experience and is not recommended initially (Sullivan 1988). Figure 2.4b,
c, d shows Taguchi’s three models. For the smaller-the-better type, as Taguchi

classifies quality characteristics:
K ¼ R=ðUSLÞ2 ð2:5Þ
R is the quality loss at the USL. This is the way to calculate k in the manu-
facturing sector. However, for service quality, the requirements differ by person,
and thus, the coefficient k of the QLF is no longer a constant. An example for the
smaller-the-better type in the service sector is the waiting time (Li 2003).
The difference between the step-loss function and Taguchi’s QLF can be
explained by the Ford Motor example provided by (Gunter 1988). Also, to explain
the concept of ‘loss to society,’ an example of a vinyl sheets manufacturer is
provided by (Sullivan 1988).
Taguchi’s QLF defines quality as ‘uniformity around a target value,’ with the
specification limits being irrelevant in this context as the overall loss caused by a
product increases if the product deviates more and more from the target, regardless
of whether it is within the specification limits or not. Products manufactured closer
to the targets function well and are easily assembled together. The concept of
conformance to specifications can become a barrier to QI. Taguchi’s QLF can
justify spending money to improve the capability of a process even when it is
capable. Taguchi’s QLF has the unique advantage of overcoming the system of cost
control which is an internal company inhibitor to QI. Most US companies impose
financial payback guidelines which must be met by improvement actions, and these
guidelines often prevent QI. An example from Nippondenso, a Japanese company
that uses Taguchi’s QLF in project or QI initiatives prioritization, showed that out
of 43 characteristics in nine processes, the top priority was for a process with a
10-Sigma capability and not for other processes with less Sigma values. US
companies would never assign priority to a process with 10-Sigma capability. They
need to use Taguchi’s QLF to translate the idea of process and product design
optimization to improve cost and quality (Sullivan 1988).
2.9 Quality Function Deployment (QFD)
According to Tan and Shen (2000), QFD is a proactive design approach that was
introduced by Akao in Japan in 1966 as a QI tool which spread later to be used in
different fields in North American companies in the early 1980s. It is a systematic
and multilevel development tool used in TQM to translate customer needs or
requirements into product and process technical design features or characteristics
and to facilitate the formulation of business problems and solutions. Some of the
North American companies using QFD are Ford, IBM, and Xerox. In a broad sense,
QFD is a management philosophy which requires management commitment (Chen
2007). It is similar to Pareto law where 20% of considered items affect 80% of the
problem, and thus, they are the most influential.
2.9 Quality Function Deployment (QFD) 21
QFD is a communication tool and a QM and planning approach. It is based on

customer feedback and is used to implement TQM. It helps explain how the pro-
cesses of an organization interact to drive customer satisfaction (Tan and Shen
2000). It is a structured way (using project management rules) for developing new
products based on the assessment of customer requirements (Matzler and
Hinterhuber 1998). It is also considered as a QMS that builds quality into the
product from the early design stage, and it translates customer demands into design
targets (Bayraktaroglu and Ozgen 2008).
One of the QFD forms has four phases: the house of quality (HOQ), product
characteristics design and parts deployment, process design and planning, and
process control features and production planning. The HOQ is the most commonly
used form (Fig. 2.5), and it connects several sub-matrices, links technical
requirements with customer needs, and ranks the technical characteristics to choose
the most effective ones. The technical matrix is part of the HOQ mapping of the
interrelationships between the technical characteristics that lead engineers to
potential innovations and trade-offs. The technical matrix and the cross-functional
teams are two important factors for innovative product development which requires
open and frequent communication of information (Shen et al. 2000). The HOQ is
based on the belief that products should be designed to achieve total satisfaction
(Tan and Shen 2000) through concurrent engineering of processes and products
including reliability. The HOQ has been the focus of the QFD-related literature as it
contains the most critical company information regarding its customers and com-
petitors (Chen 2007). It converts customer needs into product features, then to
process reengineering design features and to control plans.
Fig. 2.5 An example of a HOQ as adapted from (Shen et al. 2000)

Fig. 2.6 A Japanese

company versus a US
company (Sullivan 1986)
The first phase in QDF is to understand and analyze the customer requirements
in the HOQ matrix (Fig. 2.5) which translates these requirements into technical
characteristics. One of the sub-matrices of HOQ is the planning matrix which
typically contains the raw importance and customer evaluation of competitors and
own company (Bayraktaroglu and Ozgen 2008). After the first phase of product
planning and identification of technical engineering characteristics, the second
phase is product design which includes feasibility and plays the most important role
in the product performance during its life cycle. Then, the third phase is process
design and the fourth is process QC.
Here are the steps of QFD (Foster 2007): List the customer requirements and the
technical design characteristics, evaluate the relationship between the requirements
and characteristics, evaluate the correlation between characteristics, assess the
requirements and compare to competition, prioritize the requirements and charac-
teristics, and conduct final evaluation of absolute and relative weights to determine
engineering decisions.
QFD has the following advantages: It helps companies make trade-offs between
customer needs and manufacturer’s capacity, improves communication between
departments, builds quality upstream, increases customer satisfaction, considers the
critical production control points, gathers information for product development,
shortens time to market (Jariri and Zegordi 2008), reduces delivery costs (Lee et al.
2008) and information system design problems (Govers 2000), compares compa-
nies to competitors in terms of customer expectations (Matzler and Hinterhuber
1998), increases market share, efficiency, and competitive advantage, reduces cost,
reduces prelaunch lead time, reduces after-launch changes (Fig. 2.6), and intro-
duces breakthrough innovation.
2.10 Supply Chain Management (SCM)
A Supply Chain (SC) is the entire network of activities of a firm which link
suppliers, warehouses, factories, stores, and customers. These activities include not
only material flow, but also services, information, and funds (Nahmias 2009). SCM
is about integrating the processes and optimizing the efforts of all members of the
2.10 Supply Chain Management (SCM) 23
chain to improve quality, responsiveness, pricing, material flow, add more value to
customers, and reduce materials costs (Kannan and Tan 2005; Chan and Chan
2006). SCM is a new management philosophy viewed as an initiative focusing on
the coordination of the manufacturing, logistics, materials, distribution, and trans-
portation as well as on how companies utilize their suppliers’ capabilities to
improve competitive advantage. It is the chain that links processes of different
organizations from raw materials to the end user which can be extended to the
after-sale services and recycling (Tan et al. 2002).
Also, SCM is a set of approaches used to achieve the efficient integration of the
SC entities in order to produce and distribute the right quantities, at the right time,
to the right place, so that system-wide costs are minimized without sacrificing
service requirements (Simchi-Levi et al. 2003). The objectives of the SCM are
productivity improvement, inventory reduction, and cycle time reduction in the
short term and the improvement of customer satisfaction, profit across the whole
SC, and market share in the long term (Tan et al. 1998). The SC business entities as
well as its main stages and their indices are shown in Fig. 2.7. The SC is also
referred to as the logistics network (Fig. 2.8).
The term SCM emerged from Procter and Gamble in the early 1980s as they
tracked the flow of goods in the distribution channel. The focus in organizations has
been shifting to the cost opportunities in the SC since the traditional focus of firms,
i.e., manufacturing, has become relatively efficient. The primary trade-off in SCM is
between cost and time to respond (Nahmias 2009). In addition to being fast and
cost-effective, a superior SC is agile, adaptable, and aligning all of its partners’
interests to satisfy customers (Lee 2004).
The concept of SCM has grown from inventory management to overall opera-
tions management (Yang et al. 2007). SCM is about the efficient performance of
activities, such as handling products, partnerships, new product development, and
promotions. It does not only focus on products flow, but also on life cycle from the
process, product, and SC design, through promoting and merchandising to fulfilling
demand (Kopczak and Johnson 2003). The literature revealed that SCM either
focuses on the transportation and logistics function, the purchasing and supply
Fig. 2.7 Integrated SC entities and stages (Antony et al. 2006)

Fig. 2.8 A generic example of a SC
Fig. 2.9 SC strategic planning process (Foster 2007)
function, or the integrated material management function which includes the pre-
vious two functions (Tan et al. 2002).
Deliveries to all intermediate points in the SC, which is a dynamic discrete event
system, have to be controlled with low variability (synchronized) to make the SC
efficient (Antony et al. 2006). This is important to achieve lower levels of inventory
through on-time delivery of more frequent and smaller batches of products. An
effective SCM requires a strategic planning process as in Fig. 2.9. This process
greatly resembles Deming’s PDCA cycle. To achieve its full impact, SCM needs to
be fully implanted in the business strategy and considered throughout the product
life cycle (Kopczak and Johnson 2003).
The initial step in formulating an effective SC strategy is to understand the
demand of supplied products which can be classified into functional (which requires
an efficient SC to supply the predictable demand) or innovative (which requires a
responsive SC to supply the unpredictable demand) (Fisher 1997). To build an
effective SC, firms must shift from being functionally based to business
process-focused, internally and across the SC. This leads to the development of
2.10 Supply Chain Management (SCM) 25
frameworks to link strategy, SC processes, and proper performance metrics across

organizations (Amer et al. 2007). SCM practices include (Tan et al. 2002; Kannan
and Tan 2005):
• Integrating activities across the SC and becoming more responsiveness.
• Establishing a communication system and frequent contacts with all SC
members.
• Communicating future strategic needs to all SC members.
• Using cross-organizational teams.
• Building trust among SC members and involving them in planning of
marketing.
• Identifying additional markets (the SC can extend beyond immediate members).
• Participating in the market efforts of own customers.
• Participating in the suppliers’ sourcing decisions and involving them in the
product and process design as well as production planning.
• Partnering with the few best suppliers to improve their management.
• Outsourcing non-strategic activities in order to focus on the core ones internally.
• Determining customer future needs and contacting customers for feedback.
• Locating close to customer and requiring supplier to locate close to own
business.
• Increasing on time delivery and JIT abilities of own firm and of partners.
SCM activities encompass the strategic levels (including decisions of
long-lasting effects on the system), tactical levels (including decisions updated
regularly), and operational levels (including daily decisions). SCM includes deci-
sions related to issues such as distribution network configuration, inventory control,
supply contracts, distribution strategies, SC integration and strategic partnering,
outsourcing and procurement, product design, information technology and
decision-support systems, and customer value (Simchi-Levi et al. 2003; Manzini
et al. 2008). Operational SCM key performance indicators (KPIs) include cycle
time, utilization rate, forecasting accuracy, and lead time, whereas financial KPIs
include sales, material, transportation, and inventory (Yang et al. 2007).
SCM has caused six main shifts in business focus from: cross-functional to
cross-enterprise integration, physical efficiency (producing and distributing) to
market mediation (matching supply with demand while remaining efficient),
improving supply processes to coupling that with getting earlier demand infor-
mation and affecting demand (using or eliminating promotions, synchronizing
planning cycles, sharing information, streamlining replenishment using
vendor-managed inventory as an example), single-company product design to a
collaborative and concurrent design of product, process and SC (i.e., design for
SCM), cost reduction to breakthrough business models, and mass-market supply to
tailored offerings by integrating the company’s SCM, Customer Relationship
Management (CRM) and Enterprise Resource Planning (ERP) systems to increase
the customer’s loyalty (Kopczak and Johnson 2003).
Fig. 2.10 Michael Porter’s value chain as adapted from (Foster 2007)
SCM implementation is complex and difficult. Difficulties in SCM are due to the
challenge of designing and operating a SC, while minimizing the total system-wide
costs (global optimization arising from the complexity of the SC network, the
conflicting objectives of the different elements of the SC, the continuous change in
the elements of SC, and the variations in demand and costs) as well as maintaining
the total system-wide service levels and the uncertainty in customer demand
forecast (arising from the challenge of matching supply and demand, the consid-
erable variation in inventory and back-order levels across the SC, inaccuracy of
forecasting, and the additional sources of uncertainty to the demand, such as
delivery lead times and manufacturing defects) (Simchi-Levi et al. 2003).
The value chain is a tool which disaggregates a company into its core activities
to reduce costs and find sources of competitiveness (Fig. 2.10). The value system is
composed of a group of value chains. One of the significant aspects of the value
chain is the connection between a chain of suppliers and consumers. The SCM
concept extends the value chain economic concept and provides a more realistic
view of it (Foster 2007).
SC considerations add a third dimension to concurrent engineering (Nahmias 2009).
An example of a SCM model that utilizes software is the Supply Chain Operations
Reference (SCOR) model (Dasgupta 2003) which is considered as an extension of
Business Process Reengineering (BPR). It is based on five levels: plan, source, make,
deliver, and return. However, it lacks analytical tools for problem solving and may not
provide the flexibility to adapt to SC variability (Amer et al. 2007).
2.11 Company-Wide Quality Control (CWQC)
The Japanese built their own MS based on the Total Quality (TQ) teachings of
Deming, Juran, and others (Evans and Lindsay 2002). Their MS objectives included
Quality Control (QC), quality assurance, and respect for humanity (Monden 1983).
2.11 Company-Wide Quality Control (CWQC) 27
Ishikawa (1985) indicated that QC and quality assurance are the essence of Total
Quality Control (TQC) which originated by Feigenbaum. The Japanese-style TQC
is referenced by the phrase ‘Company-Wide Quality Control’ (CWQC) (Yang
2004) and is broader in scope than its North American counterpart, i.e., TQC. The
Japanese approach differed as it focused on all employees training as well as
promoting QC and was later called CWQC in the 1968 QC Symposium (Ishikawa
1985), about ten years after TQC was introduced in the West (Garvin 1988).
Ishikawa (1983) defines CWQC as a system of means to economically produce
goods which satisfy the customer’s requirements of quality and value for money; it
divides the benefits among consumers, employees, and stockholders while
improving the quality of people’s lives.
The traditional literature in the USA refers to the Cost-Of-Quality (COQ) as the
cost of assuring conformance and of managing as well as correcting the material
defects. In CWQC, quality cost is the cost to the society determined by design,
manufacturing efficiency, assembly sales, service, customer retaining, and contri-
bution to society (Sullivan 1988). TQC covers only the first three stages of CWQC
as shown in Fig. 2.11. TQC helped many US companies realize considerable QIs.
However, US-made products cannot compete in cost with Japanese imports. Beside
the issue of quality, CWQC cleverly addresses the issue of cost reduction in order to
be more competitive in the global market. The seven stages in CWQC are (Sullivan
1988) (Fig. 2.11):
1. Inspection after production (product oriented): This includes the traditional QC
activities such as statistical sampling plans, finished product inspection, trou-
bleshooting, and corrective actions. However, this reactive traditional problem
solving and defect-correction approach which is popular in many US companies
does not improve quality. The Japanese style is to put more emphasis on the
system correction for QI and to spend more quality efforts in product devel-
opment than in the design and manufacturing stages.
2. QC during production (process oriented): Quality assurance during production is
mainly based on the proper implementation and knowledge of SPC. Many of the
applications of SPC in US companies have little value to QI as they focus
merely on keeping the process in control without understanding Shewhart’s
sense of identifying and eliminating the root causes of variability.
3. Quality assurance involving all departments (systems oriented): Some US
companies adopted a system-oriented structure of separate functional organi-
zations interacting with each other. However, the quality teams’ focus on
problem solving limited their success in mobilizing quality CI. Ishikawa indi-
cated that US companies are strong vertically but weak horizontally. They
typically identify QC with manufacturing and assembly. CWQC requires strong
horizontal interaction with QC evident across all activities and the VOC
deployed horizontally along the flow of the product.
4. Education and training (humanistic aspect of quality): Japanese focus more on
education as it improves people’s thinking to maximize the human contribution
in process and product improvement, and then on training to improve their
skills. US companies rarely educate people after graduating from schools.

Investing in education and training resulted in reductions in manufacturing costs
through better results in process and product design optimization, and through
larger span of control due to empowerment. Another aspect in education and
training is the job rotation (cross-training) for employees and managers across
different vertical departments to enhance knowledge and facilitate horizontal
interaction. US companies tend to limit job rotation to vertical departments. This
step is the base for the next three steps.
5. Product and process design optimization for more robust function (society
oriented): One significant method for design optimization has been developed
by Genichi Taguchi. Taguchi defined quality as the characteristic that avoids a
loss to society from the time the product is shipped. All Japanese speak the same
language of quality, and thus, quality is no longer the problem of a local quality
department. Quality is infused in the product’s life and the company structure.
Japanese built quality into the engineering process, whereas in the USA, there
has been a tendency to exclude QC from research and development engineering
activities. Taguchi’s methods are not only techniques for experimental design
and analysis, but also an integrated system to develop specifications, engineer to
these specifications, and manufacture to these specifications. Here is an outline
of Taguchi’s methods and steps:
• For an external customer to buy a product, it is important that it is desirable
to own, meets the intended purpose, increasingly satisfying during service,
robust against environmental changes, deteriorations and wear which cause
functional variations.
• The objectives of the external customer are fulfilled by optimizing process
and product design for high quality at low cost, the use of the QLF for QI
quantification in terms of cost and for tolerance design, and the use of QFD
and VOC deployment through internal customers across all departments (i.e.,
CWQC stages 5, 6, and 7).
• Taguchi’s steps include system development, parameter design, and toler-
ance design.
• Taguchi’s methods include QLFs.
• Taguchi’s concepts include that the analysis result does not need to be the
best, but it needs to be the better and quicker (i.e., 50% result in 10 days is
better than 90% in 200 days). Small incremental improvements covering
many processes and products have better cumulative effect than larger
improvements on known problems.
Taguchi emphasized the importance of robust design where the level at which
the design parameter is set is the one that maximizes the performance characteristic
and minimizes the performance characteristic variation in the case of errors around
the design parameter level. Signal variables are design variables that affect the
performance level linearly over the setting range. Control variables are likely to
have non-linear effect and thus are used to control the design’s sensitivity to
2.11 Company-Wide Quality Control (CWQC) 29
Fig. 2.11 Seven stages of quality (Sullivan 1988)
different types of noise. This duality makes it possible to set control variables to
achieve robustness of design (insensitivity to variation) and improve target response
by manipulating signal variables. This two-stage optimization approach is in the
center of Taguchi’s statistical approach (Gunter 1988).
6. The Taguchi QLF (cost-oriented): (Sect. 2.7 for details on Taguchi’s QLF).
7. QFD to define the VOC in operational terms (customer oriented): QFD brings
QC to product development and ensures that customer requirements are fulfilled
by all functional activities of a company. Customers often mention second- or
third-level requirements when asked about their wants. These may not even
include some primary requirements (unspoken). Manufacturers need to fill in the
gaps and the incomplete requirements and identify the primary ones. Kano
model can provide a significant help in doing such as task. To be effective, QFD
activities must be carried out systematically and continuously as part of CWQC.
Top management must be positively involved in the corporate product strategy
which includes the determination of new product quality values and conflicting
design requirements (Sect. 2.8 provides more details on QFD).
Finally, there are various differences between the Japanese QC and the western
QC. For example, Japanese QC puts more emphasis on employees and suppliers
training and education, is stronger in vertical relationships, has lower turnover rates
and a pay system based on seniority more than merit (Ishikawa 1985).
2.12 Management Systems (MSs)
A system can be defined as a network of interdependent components, which assist

each other and should be managed to achieve a unique aim (Deming 1993). It is an
organized framework of components (inputs, outputs, and sub-systems) forming a
whole visual unit (Johnson et al. 1964). Management, on the other hand, is the
integration of all resources into a total system to achieve an objective and has its
functions that mainly include planning, organization, control, and communication
(Johnson et al. 1964). Other functions include decision-making, information
recording, labor management, developing standards and procedures to achieve the
outputs, and organizing experiences so that the performance can be improved
(Cunningham 1979).
The management theory regarding operating systems is still evolving (Arnheiter
and Maleyeff 2005). Management is considered immature when compared to other
social sciences (Anderson et al. 2006). There have been several attempts to develop
administrational rules for management, but the right way to manage depends on the
circumstances of an organization as some theorists suggested (Castle 1996).
Management concepts take two recurring approaches: rational instrumental (which
focuses on controlling through surveillance and improvement methods) and social
normative (which focuses on the quality of the relationship between the worker and
the supervisor) (Harnesk and Abrahamsson 2007).
According to Keller (1978), Burns and Stalker claimed that there were two types
of MSs: mechanistic (which is highly structured with specific functions and more
suitable for stable business environments) and organic (which is less formal,
empowering, horizontal, and more suitable for dynamic business environments).
The organic was later called organismic (which has a survival goal), and there is a
third model called cultural MS (where leadership shares control, mutual adjustment
occurs in vertical and horizontal directions, and learning, human development, and
change are valued) (Spencer 1994).
A MS is simply a way or a plan for managing a business that can be considered
formal when documented and communicated. The increasing global competition
(Karapetrovic and Willborn 2000) and the evolution of the concept of quality have
influenced the development of MSs (Scipiono et al. 2001). In general, MSs are
developed to meet the requirements of all or some of the following management
disciplines: quality, health, safety, environment, security, financial (Scipiono et al.
2001; Compliance Help Consulting 2007), and others. MSs can also be defined as
groups of processes which work together in harmony and use different resources to
achieve management goals (Karapetrovic and Willborn 1998). Some examples of
internationally recognized MS standards are: ISO 9001 and QS 9000 for the
automotive industry. Also, CI methodologies such as LSS can be considered as
MSs (McAdam and Evans 2004).
An effectively designed MS is a key to adapt to customer requirements
(Gunasekaran 2006). Most MS standards use Deming’s PDCA cycle, and they can
be developed internally, internally using templates or externally using consultants
2.12 Management Systems (MSs) 31
(Compliance Help Consulting 2007). The expression ‘management system’ is often

used to refer to QMSs such as ISO 9001 and health or safety MSs. However, in the
context of this book, the expressions of MS, operating system, and business system
are interchangeable as they encompass all aspects of managing and improving a
business, in addition to QMSs.
2.13 Quality Management Systems (QMSs)
A QMS includes all procedures needed to integrate QM practices into an organi-

zation, and it supports CI (Nanda 2005). The following is a discussion of some
QMSs.
The most popular standard for a QMS are the standards of the ISO family. These
are based on the principles of customer focus, leadership, people involvement,
process focus (on mapping, documentation and KPIs), a management approach
focused on systems, CI, decisions made based on facts, and supplier relationships
(Pfeifer et al. 2004).
Self-assessment audits based on quality award models, such as the Malcolm
Baldrige National Quality Award (MBNQA) and the European Foundation for
Quality Model, i.e., EFQM or BEM (Business Excellence Model) as also called, are
considered as QMSs. The MBNQA has three basic components: strategy and action
plans (to guide resource decision and align performance measures), system (consists
of six categories that define the organization, operations, and results), and information
and analysis (critical for fact-based performance management). The model aims to
cover strategy-driven performance, alignment of strategy, workforce performance
and learning, key processes, and business results (Kaye and Anderson 1999).
MBNQA consists of seven areas of quality measures, which are leadership, infor-
mation and analysis, strategic quality planning, human resource management (HRM)
and development, management of process quality, quality and operational results, and
customer focus and satisfaction (Beatty 2006; Jitpaiboon and Rao 2007). The EFQM
has the following principles: results focus, customer orientation, leadership, man-
agement by facts, people involvement, improvement, and social responsibility
(Ricondo and Viles 2005).
These quality award models are the second step after adopting QMSs, such as
ISO 9000, toward achieving TQM as they pave the way for an integrative MS
(Mangelsdorf 1999). TQM can be considered as the umbrella for tools such as ISO
9000 and MBNQA (Leonard and McAdam 2004; Harnesk and Abrahamsson 2007).
The significant addition of quality award models to TQM can help organizations
strategically achieve integrated management (Soltani and Lai 2007). They are useful
where an organization already has a base and culture for improvement (Kaye and
Anderson 1999). Next, Chap. 3 discusses the integration of Six Sigma and TQM.
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Yang, C.-C. (2004). An integrated model of TQM and GE-Six Sigma. International Journal of Six
Sigma and Competitive Advantage, 1(1), 97–111.
Yang, H. M., Choi, B. S., Park, H. F., Suh, M. S., & Chae, B. (2007). Supply chain management
Six Sigma: A management innovation methodology at the Samsung Group. Supply Chain
Management: An International Journal, 12(2), 88–95.
Part II
Enhancement of the Six Sigma
Methodology
Chapter 3
Six Sigma and TQM
Abstract For any manufacturing system, TQM and Six Sigma are important
methodologies used for CI. Effective understanding of these methodologies and their
relationship will provide an industry with a competitive edge. Many industrial
organizations today are using either TQM or Six Sigma as the core for their process
QI efforts. There is a lot of dispute on which methodology is superior, how they
relate to each other, what the common grounds are, and what their differences are. As
such, the relationship between TQM and Six Sigma is worth further investigation. In
this chapter, a thorough comparison is introduced between the two methodologies.
More particularly, this chapter investigates the similarities and differences of the two
methodologies and how they relate to each other. Finally, this chapter introduces
how TQM and Six Sigma fit together in order to develop a new structure for
integrating them together which will provide an improved approach for CI.

Keywords Total Quality Management (TQM) Six Sigma Continuous

Improvement (CI) Process improvement Competitive advantage
Integration
3.1 Introduction
TQM has been a leading management concept for CI. Six Sigma is a
well-disciplined and structured approach used to enhance process performance and
achieve high levels of quality. TQM and Six Sigma share the same goals of pur-
suing customer satisfaction and business profit. However, TQM cannot be fully
replaced by Six Sigma. On the other hand, TQM has not achieved the radical results
that have been achieved by Six Sigma (Yang 2004). Next, a thorough comparison
of the two methodologies is discussed.

https://doi.org/10.1007/978-3-319-99034-7_3
40 3 Six Sigma and TQM
3.2 Comparison and Discussion of Six Sigma and TQM
Six Sigma represents a new wave of the quality management evolution (preceded
by TQM evolution) toward operational excellence (Basu 2004). The definition of
TQM is different from that of Six Sigma, but the aims are similar (Anderson et al.
2006). Six Sigma has additional data analysis tools and more financial focus than
what is found in TQM (Kwak and Anbari 2004). TQM has a comprehensive
approach that involves and commits everyone in a company, while Six Sigma has a
project management approach that is associated with a team (Anderson et al. 2006).
Arnheiter and Maleyeff (2005) have indicated that a number of components of Six
Sigma can be traced back to TQM. This explains that Six Sigma is an extension of
TQM and that they both share similar principles.
Snee (2007) suggested that there are benefits for integrating Six Sigma with the
Baldrige assessment (a TQM model) and ISO 9000. Antony (2004) stressed that it
is important to remember that Six Sigma has a better record than TQM since its
inception in the mid-1980s. Tables 3.1 and 3.2 represent a summary of a literature
review on the Six Sigma and TQM similarities and differences, respectively. Based
on an extensive literature review [Yang (2004) for example] and the authors’ own
experience, a comprehensive and appropriate basis for comparison based on 25
dimensions is considered here.
It is seen from Table 3.1 that Six Sigma and TQM share common ground in
terms of theory, philosophical approach, CI focus, aims, principles, links to the
teachings of Deming, approach to design, focus on customer, focus on process,
dependence on management support, change approach, and complexity. On the
other hand, Table 3.2 represents that Six Sigma and TQM are different in terms of
mutual relationship (Six Sigma can be seen as an expansion for and a part of the
holistic TQM which in its turn can help Six Sigma), financial focus and scope,
incentives and career development, strategic link, project selection approach,
training focus and intensity, team approach, structure, progress monitoring, basis
for motivation, tools, performance target, focus on suppliers, and record of results.
However, these differences can be considered as additional strengths for the inte-
gration of TQM and Six Sigma as the weaknesses of one are completed by the
strengths of the other. According to Yang (2004), Lucas (2002) proposed the
following based on observation of many firms:
Current business system þ Six Sigma ¼ TQM ð3:1Þ
Schroeder et al. (2008) proposed that the introduction of Six Sigma to organi-
zations that already have TQM would help them realize incremental benefits in their
financial results and customer service. The application of Six Sigma can help
strengthen the values of TQM within an organization (Anderson et al. 2006). Thus,
TQM and Six Sigma are similar in many aspects and compatible with each other.
They share numerous values and aims and both can benefit from the advantages that
each can provide where TQM can be the holistic and comprehensive umbrella that
3.2 Comparison and Discussion of Six Sigma and TQM 41
Table 3.1 Similarities and relationship of Six Sigma and TQM

Dimension Six Sigma TQM
Theory Similar to TQM in terms of theory Both draw from behavioral and
and handling methods (Hwang 2006) quantitative sciences (Friday-Strout
and Sutterfield 2007)
Focus (on Six Sigma has a stronger emphasis on TQM and Six Sigma share same
customer and customer satisfaction through mainly values such as process focus,
process) focusing on critical to quality (Klefsjo customer focus, CI, and use of facts
et al. 2001 and Schroeder et al. 2008) and data (Tannock et al. 2007).
Customers are in the focal point of
TQM (Voros 2006). Both focus on
product quality and quality
assessment (Cheng 2008)
Management It has better success obtaining support TQM puts less stress on the support
support (Montgomery 2001) by management and financial
department (Hwang 2006). Both
depend on it
Basis It includes two dimensions of TQM can be described as a
philosophy (or management) and philosophy and is considered as a
methodology (or analysis) (Hwang management process that applies
2006) management principles (Jitpaiboon
and Rao 2007)
Aim It is an improvement methodology TQM aims at improving all processes
(Hoerl 2004). Six Sigma and TQM within an organization, and it treats
focus on CI (Antony 2006) and share the organization as a total system
similar principles and aims (Shah and Ward 2007). It is a holistic
Quality Management System
(Jitpaiboon and Rao 2007) or
management process with the goal of
generating a quality-based culture
(Aly et al. 1990)
Link to DMAIC is closely linked to PDCA TQM is based on teachings of
Deming cycle (Haikonen et al. 2004; Deming (Snee 2004) in which the
Linderman et al. 2006), and it main tenets of Six Sigma are
improves upon the PDCA cycle embedded (Maleyeff and Kaminsky
(Tannock et al. 2007) 2002; Black and Revere 2006)
Change Six Sigma is focused on belts leading TQM and Six Sigma use training and
the projects with the involvement of organization-wide support as levers of
the team members change (Buch and Tolentino 2006)
Approach to Its design process is more prescriptive TQM and Six Sigma stress the
design (Schroeder et al. 2008) as it uses the importance of using QFD and
DMADV or DFSS which provide cross-functional design and design for
stronger focus on product design manufacturability (Schroeder et al.
(Upton and Cox 2008) 2008)
Complexity It is criticized for the difficulty to stick Top managers often find it difficult to
with the rigor of the approach understand TQM, and it does not
(Linderman et al. 2006) work well for processes that require
major changes (Klefsjo et al. 2001). It
is very difficult to manage or evaluate
as it evolved to become so
all-encompassing and intangible
(Jitpaiboon and Rao 2007)
Table 3.2 Differences and relationship of Six Sigma and TQM

Strategic link Six Sigma provides better alignment A CEO considers TQM as quality
with organizational strategic business slogan carried without translated goals
objectives (Antony 2006) to implementable initiatives (George
2002)
Mutual Six Sigma is an expansion of TQM Six Sigma is an extension of TQM
relationship (Terziovski 2006; Proudlove et al. (Klefsjo et al. 2001; Proudlove et al.
2008) with components traced back to 2008). Existing TQM activities can
TQM (Aly et al. 1990; Arnheiter and help in the implementation of a Six
Maleyeff 2005) and can be viewed as Sigma system (Cheng 2008). TQM
a methodology within TQM and not has become an umbrella for Six Sigma
as an alternative (Klefsjo et al. 2001) and other tools (Harnesk and
Abrahamsson 2007)
Financial It tracks cost savings on a project by It has an organization-wide
savings project level (Schroeder et al. 2008). It calculation for COQ
has more financial focus (Kwak and (organizational-level tracking)
Anbari 2004) (Schroeder et al. 2008)
Project Project selection rights reside with There is no clear way of prioritizing
selection management to ensure financial and projects that are carried out
strategic implications are considered irrespective of cost to operation
(Schroeder et al. 2008) (Banuelas and Antony 2002; Bhuiyan
and Baghel 2005). The link between
economy and project selection was
missed in most TQM implementations
(George 2002). Projects can be
selected by bottom-up approach which
is often based on convenience
(Schroeder et al. 2008)
Training It is a structured training focused on It is a comprehensive approach that
focus Belts or levels (Basu 2004) that create involves everyone (Ricondo and Viles
an infrastructure for implementation 2005; Anderson et al. 2006) using
(Terziovski 2006) without focus on improvement teams that are
wide team participation (Schroeder sometimes in the form of a quality
et al. 2008) department (Schroeder et al. 2008)
Functional It uses an intraorganizational It uses an interorganizational team for
team cross-functional team for CI (Cheng CI (Cheng 2008)
2008)
Criticized for It is criticized for not focusing on all Terziovski (2006) indicated that Snee
people and culture (Linderman et al. claims TQM does not integrate human
2006). However, it is less difficult to elements of improvement like
reengineer, restructure, and evaluate teamwork as good as in Six Sigma
breakup of an organization using Six
Sigma as the team is more
independent of the processes under
consideration (Hwang 2006)
Incentives It has less challenge to have incentives There is less incentives and career
to pursue improvement (Terziovski development focus in TQM (Upton
2006) and Cox 2008)
(continued)
3.2 Comparison and Discussion of Six Sigma and TQM 43
Table 3.2 (continued)

Motivation Its motivation is inspired by tangible It is driven by idealism of quality
benefits (Motwani et al. 2004) (Motwani et al. 2004)
Training There is more intensity in the training TQM uses shorter length for training
intensity of full-time improvement individuals (i.e., 1 week) but targets all people in
(Schroeder et al. 2008) the plant (Schroeder et al. 2008)
Structure It is a project-focused approach using TQM is not sequential, and it does not
DMAIC, reinforcing Juran tenets have a specific route used by all
(Basu 2004) and a well-structured organizations no matter what their
DMAIC road map for deployment cultural circumstances look like
(Terziovski 2006). A key strength in it (Leonard and McAdam 2004). TQM
is that it builds a QI structure in is criticized for lack of clear definition
parallel with existing management or strategy and structured
structure (Linderman et al. 2006) communication (Ricondo and Viles
2005)
Progress It has a mix of long- and short-term It promotes open-ended and
monitoring focus with better monitoring of open-financed continuous QI (Klefsjo
progress toward goals (Motwani et al. et al. 2001). It has a long-term focus
2004) with loose monitoring of progress
toward goals (Motwani et al. 2004)
Tools It is not new in terms of the tools and TQM and Six Sigma attempt to find
techniques, but it has a new root causes, but TQM is not as specific
deployment approach to process or focused (Klefsjo et al. 2001). It has
improvement (Banuelas and Antony mainly seven quality and seven
2002). It has additional data analysis management basic tools (Arnheiter
tools (Kwak and Anbari 2004) with and Maleyeff 2005)
more statistical emphasis (Basu 2004).
It is criticized of focusing on tools
more than problems (Linderman et al.
2006)
Performance Six Sigma performance target applies It has a more comprehensive
target to a single critical quality performance target which applies to
characteristic (Banuelas and Antony the total product (Banuelas and
2002). Sigma level can be used to Antony 2002). TQM does not have a
assess quality level attained and can specific way to quantify quality level
be used in benchmarking (Klefsjo attained by an organization (Klefsjo
et al. 2001) et al. 2001)
Suppliers Six Sigma targets supplier only if they A vital element of TQM is targeting
are critical to quality at process under supplier management (Schroeder et al.
investigation (Schroeder et al. 2008) 2008)
Results Six Sigma has a better record than Some researchers found a significant
TQM since its inception in the impact of TQM practices on
mid-1980s (Antony 2004), a better operational performance, and others
record of effectiveness (Cheng 2008) did not (Shah and Ward 2003)
and is better focused (Montgomery
2001)
Note CEO stands for Corporate Executive Officer
Fig. 3.1 Integrated framework of TQM, Six Sigma, and other business blocks
reaches to all stakeholders and Six Sigma can be the extension that provides a
strong structure for achieving greater process improvements. Six Sigma has roots
traced back to TQM (Upton and Cox 2008). Six Sigma principles are embedded in
TQM (Sheehy et al. 2002), and it could be seen as a concept supporting the aims of
TQM.
Figure 3.1 shows more the high-level framework that shows how TQM and Six
Sigma are linked to other key building blocks in the business. The process
improvement and management is the block in the center which plays a key role
relative to all other blocks. The operational excellence and customer satisfaction
block on the top represents a key goal for the business. All forms of management
are directly connected to the process improvement block including strategic man-
agement, initiative management, change management, operations management,
daily management, knowledge management, HRM, and performance management.
The training block is stressed by being introduced as a block. Finally, the ‘change
leadership and culture building’ block is an important piece of this integrated
framework. This framework achieves an integration of management principles,
implementation practices, and culture change.
3.3 Summary and Conclusion 45
3.3 Summary and Conclusion
This chapter presents an extension of the previous works1 regarding these

methodologies. It included a through comparison, presented new ideas, and
incorporated them in a new framework. TQM and Six Sigma are very powerful CI
methodologies that share common grounds in terms of principles, goals, customer
and process focus, dependence on management support, approach to design,
approach to change, and complexity.
On the other hand, they are different in terms of mutual relationship, financial
focus, training focus, incentives, strategic link, project selection approach, team
approach, structure, motivation, tools, performance, and record of results. However,
these differences can be considered as additional strengths for the integration of
TQM and Six Sigma as the shortcomings of one are completed by the strengths of
the other. Despite their differences, there are many areas where TQM and Six Sigma
intersect and there are compatible areas where one of them may excel forming an
opportunity to help the other one. Thus, the integration of the two is concluded to
be possible and beneficial. Also, TQM and Six Sigma were presented as part of a
framework for CI. TQM can be the holistic and comprehensive umbrella that
reaches to all stakeholders, and Six Sigma can be the extension that provides a
strong structure for achieving greater QIs. Raj (2014) cited the thorough compar-
ison of TQM and Six Sigma done in this chapter, and Zivaljevic et al. (2016) cited it
on their work on quality evolution. Next, Chap. 4 provides a detailed description of
the integration of Six Sigma and Lean.
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1
This chapter is mainly prepared based on our published work:
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References 47
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Chapter 4
The Integration of Six Sigma and Lean
Abstract There is a great necessity for the effective implementation of CI

methodologies to all stakeholders at an industrial organization, including owners,
workers, customers, and the society in general. The rate of improvement determines
the survival of an organization as competition gets tougher in today’s global
markets. Six Sigma and Lean are two well-recognized CI methodologies which are
typically used to separate from each other. On the other hand, the effective inte-
gration of these methodologies will provide a company with a competitive
advantage. In this chapter, the benefits for integrating Six Sigma and Lean are
outlined, followed by a thorough comparison between the two methodologies. Also,
this chapter investigates some of the existing models that describe how Six Sigma
and Lean fit together. Finally, a new detailed description for integrating Six Sigma
and Lean is developed to provide an improved approach for CI. The proposed
structure is built upon the existing DMAIC structure which is well renowned in the
literature.

Keywords Lean Six Sigma Integration Continuous Improvement (CI)

Innovation Total Quality Management (TQM) Company-Wide Quality

(CWQ) Quality culture
4.1 Introduction
Among various CI methodologies, Six Sigma and Lean stand as the best
methodologies widely used by various industries and are currently referred to as the
state of the art (Arnheiter and Maleyeff 2005). Also, they have been the techniques
yielding the greatest impact (Kumar et al. 2008). However, even with the best
methodologies in place, numerous studies have pointed out that most industries are
failing in their CI efforts (Devane 2004; Bhasin and Burcher 2006).
There is a drawback in applying one of the two methodologies alone as the CI
efforts may have the deficiency of being slow. The idea of integrating the two
methodologies is well accepted and can be utilized in the view of Juran’s trilogy

https://doi.org/10.1007/978-3-319-99034-7_4
50 4 The Integration of Six Sigma and Lean
Fig. 4.1 Juran’s trilogy as adapted from (Juran and Godfery 1998)
which includes three managerial processes of quality planning, QC, and QI.
Figure 4.1 explains Juran’s trilogy and shows the chronic waste (which counts for
20% of the work that needs to be redone due to the operating process being planned
that way and requires QI to be driven down) and the sporadic waste (which happens
due to the unplanned spikes resulting from operator error, process breakdown,
power failure, etc., and requires corrective actions).
Different industries are either applying Six Sigma or Lean to improve their
processes, and some apply both in parallel. However, the full benefit is not realized
without the fusion of the two into one superior methodology that overcomes the
shortcomings of each. A number of publications have been written on this topic in
favour of this integration (Bhuiyan and Baghel 2005; Bendell 2006; Snee and Hoerl
2007). Furthermore, a detailed description of this integration is needed (Anderson
et al. 2006).
4.2 The Integration of Six Sigma and Lean
Lean and Six Sigma are both considered as CI methodologies that share common
goals. In fact, they both focus on improving processes, satisfying customers, and
achieving better financial results for the business. It has been proven that Six Sigma
and Lean are excellent methodologies and it is logical that practitioners want to
integrate them (Hoerl 2004). The integration of Lean with Six Sigma was identified
as one of the emerging trends for Six Sigma in the future (Kwak and Anbari 2004;
Hoerl 2004).
4.2 The Integration of Six Sigma and Lean 51
The merger of Lean and Six Sigma can be traced back to GE as they realized that
the two complemented each other (Anderson et al. 2006). In addition, Arnheiter and
Maleyeff (2005) have indicated that companies applying one of the two method-
ologies are looking at combining them into one methodology as they have reached a
point of diminishing returns. Moreover, Snee and Hoerl (2007) anticipated that
Lean and Six Sigma will evolve into a holistic methodology. The claim that Lean
and Six Sigma have a complementary relationship is widely accepted today, and
more companies are establishing integrated programs, especially after the proven
capability of Lean and Six Sigma in leading companies like GE and Toyota
(El-Haik and Al-Aomar 2006).
Hines et al. (2004) have indicated that it is possible to integrate Lean to other
approaches without contradicting its objective of providing customers with value.
Six Sigma is expected to evolve and grow more and more in the future (Hoerl 2004;
Snee 2004). Hoerl (2004) has anticipated that Six Sigma will maintain its core
strengths while evolving. These core strengths lie in: the statistical tools, the
DMAIC structure, the infrastructure of supporting resources, the ‘Belt’ system, and
the top management commitment. Antony (2004) believes that there will be more
tools added to the Six Sigma package in the future as there is a need to improve Six
Sigma to cope with market changes. For example, the use of DMAIC and the
inclusion of mistake-proofing in the Six Sigma toolkit is an evolution. There is a
fear that the addition of tools from different fields to Six Sigma toolkit may result in
slowing down its deployment and loss of its advantage of being specific and well
defined (Hoerl 2004). However, it should be noted that not all of the tools in the Six
Sigma toolkit are used in every project.
The tools used in Lean and in Six Sigma were not all invented in these
methodologies, but they were used in a structured approach to form each
methodology. Thus, both of them can be thought of as a toolbox where certain tools
might be more suitable than others depending on the nature of the problem or
opportunity faced. Montgomery (2001) explained that the right answer to success in
improvement programs is to use the right statistical and engineering tools in the
right place in the organization. In the framework of the holistic approach suggested
by Snee and Hoerl (2007), an improvement project can use any tool from Lean or
Six Sigma any time if suitable. Moreover, a lot of tools are interchanged between
Six Sigma and Lean (McAdam and Donegan 2003) (Fig. 4.2). An integrated
approach allows the choice of the right tools from any toolkit to tackle different
problems, such as using quick Kaizen events and complex analysis projects.
Sheridan (2000) used the term Lean Sigma to describe a system that combines
both Lean and Six Sigma. Arnheiter and Maleyeff (2005) chose the term Lean Six
Sigma (LSS) in their work. Some companies who had been using Six Sigma prior
to using Lean are still calling it Six Sigma, and others use the term Six Sigma Lean
(Byrne et al. 2007). Also, some companies call it Lean Six Sigma or Six Sigma
Lean depending on which they choose as the leading initiative. Furthermore,
Honeywell calls it Six Sigma Plus (Kovach et al. 2005). In this chapter, the term
used to describe the integration of Lean and Six Sigma is Lean Six Sigma (LSS).
LSS can be described as a methodology that focuses on the elimination of waste
Fig. 4.2 An example of Six Sigma and Lean common tools
Fig. 4.3 LSS evolution as adapted from (Bevan et al. 2006; TBM Consulting 2008)
and variation. The evolution of LSS started in the 2000s (Byrne et al. 2007)
(Fig. 4.3). Recently, some companies are teaming up to coach each other like
Boeing and GE, which are leaders in Lean and Six Sigma, respectively.
Six Sigma and Lean should not be used in parallel but simultaneously so that
their synergies can be leveraged (El-Haik and Al-Aomar 2006). The attempt to
work on both methodologies in parallel is not highly successful as they are still
applied separately to solve problems. Companies doing that are facing troubles in
prioritizing initiatives, allocating resources, selecting the right methodology, and
proving financial gains.
In some organizations that have been applying Lean for years, Six Sigma is
introduced to tackle problems of product variation. Lean aims at improving the
production system. However, it does not focus on variability reduction and the use
of statistical tools (which are in the core of Six Sigma) to solve variability problems.
Furthermore, there is no sense in improving the flow of products when a large and
unpredictable portion of these products is defective (Montgomery 2001).
Hines et al. (2004) considered Six Sigma as a useful addition to Lean as it targets
variation in a way compatible with the Lean approach. However, their framework
uses Six Sigma only as a tool within Lean and this undermines the power of the
DMAIC approach. Mader (2008) has given an example of a model where a
Traditional Six Sigma (TSS) approach can be used in parallel with a Lean Six
Sigma Light (LSSL) approach which mainly uses Lean Kaizen Events to decrease
the project duration. After a project is selected as a result of a Value Stream
Mapping (VSM) exercise, a decision is made on which method is more suitable and
what phase of DMAIC is shortened. However, this does not achieve the integration
intended as it still proposes two separate approaches.
Other companies apply Lean and Six Sigma separately in a stage after another. A
LSS model proposed by Crawford (2004) presented how Six Sigma can first be
applied to improve the process effectiveness followed by Lean to improve the
system efficiency. Another approach is to deploy Lean first to eliminate waste and
unnecessary steps, and then to introduce Six Sigma after that in order to focus on
certain process steps. Bevan et al. (2006) presented that Six Sigma is approached
faster if Lean has already eliminated non-value adding steps. Snee (2005) suggested
that Lean tools can be very effective in the first stage of process improvement where
the aim is to eliminate waste and simplify processes before starting to tackle the
more difficult problems through the optimization and process control which are
mainly aimed at process steps. However, it is more effective to draw on both
simultaneously as root causes of problems occurring within or between processes
may lie in other locations than where they appeared (Snee and Hoerl 2007). Once
again, applying one methodology after another does not satisfy the integration idea
since they should be used simultaneously to achieve the most benefit.
The overall business system, proposed by Hoerl (2004), classifies the projects
into three types: just-do-it, Lean (if the solution has already been known, tried and
tested), and Six Sigma project (if the problem is complex and the solution is
unknown). However, it uses the two methodologies separately not simultaneously.
With regard to the application of Lean and Six Sigma, there are six types of
models found in organizations. The first and second types are examples of applying
one within the other (as a tool within the other). The first type presents Lean as an
encompassing methodology that uses Six Sigma as a tool within it as in the example
of a Kaizen opportunity that appears in a VSM exercise. Many organizations use
VSM as a starting point for CI where the resulting projects are Six Sigma, ISO,
projects dealing with people issues, etc. The second type presents Six Sigma as an
encompassing methodology that forces some Lean tools into the DMAIC structure.
This model is close to the model proposed later in this chapter, but it does not to use
the two methodologies holistically and equivalently. The third type is where Six
Sigma and Lean are used to separate from each other (to tackle separate problems)
according to the classification of the project. Figure 4.4 shows examples of the first
three types of models found in different organizations. The fourth type applies both
in parallel (as when applied to the same problem but separately), and the fifth
applies one after another in series (as when applied to same problem). Lastly, the
sixth applies both simultaneously which is the recommended and integrated
approach that will be detailed in this chapter.
Hoerl (2004) indicated that the approaches in the literature are somewhat
inexperienced, as they are trying to add some Six Sigma projects to a Lean ini-
tiative. This misses the biggest contribution of Six Sigma, which is the unique
deployment structure based on DMAIC, and it misunderstands what Six Sigma
Six Sigma is part of Lean

Value Stream Map (VSM)
Kaizen 1: Kaizen 3: a two
Just-Do-It day event
Step1 Step2 Step3
Kaizen 2: a Six Kaizen 4: a

Sigma project five day event
Lean is part of Six Sigma

Create current Create future
state VSM state VSM
Define Measure Analyze Improve Control
Use Lean tools Use Lean tools Use Lean tools
Lean is parallel to Six Sigma

Projects flow in
from different
sources
Project selection
and
prioritization
Improve throughput yield Improve lead time
Improve production efficiency Improve inventory levels
Choose
Six Sigma Lean
Type
Fig. 4.4 Some LSS models
does and how this relates to the contributions of Lean. Hoerl (2004) suggested using
Six Sigma as the lead initiative as it provides the DMAIC structure and bringing the
valuable tools of Lean into the picture. He also indicated that contrary to what some
Lean proponents think, Six Sigma can be used to solve issues with cycle time and
waste reduction, simply by choosing the proper CTQ metrics. Also, he viewed Lean
as a collection of world-class operating principles but claimed it provides more
principles than tools or methods. He suggested that Lean tools can be used in the
Analyze phase of DMAIC projects as a reference for auditing and can be considered
in the Design phase of a DMADV project. Thus, this is a mix of the second and
third types mentioned earlier since Lean tools are used within DMAIC and it is also
proposed to classify projects into Six Sigma or Lean.
In addition, Bendell (2006) concluded that the current literature on the combi-
nation of Six Sigma and Lean is limited and unsatisfactory when examined for a
common model, but they can be effectively combined into one system. The attempts
to combine Lean and Six Sigma were merely philosophical or near-religious
arguments. These attempts gave examples of incompatibility and conflict leading to
sub-optimal process improvement programs. An example of that was the difficulty

in the Control phase created by not prioritizing waste removal ideas resulting from
simple Lean walks. Also, Bendell (2006) criticized some of these combination
attempts for being ineffective, as they take one methodology as the dominant one
and the other as the subordinate one, ignoring the fact that each has its unique
features and benefits.
Mader (2008) suggested that LSS deployment models developed in different
organizations vary widely and that a body of knowledge is still required to be built.
There is a need for further definition of the common model proposed by Bendell
(2006), as he himself has suggested. This contains strategic features of Six Sigma
and Lean, integrating people and systems, involvement and participation, deploy-
ment change agents, results focus, tool-based approach and integrated training and
deployment.
Kiemele (2005) recommended some critical success factors for the deployment
and implementation of LSS, such as leadership alignment, proper selection of
people and projects, training, motivation, accountability, information technology,
marketing, and SCM. Antony (2006) indicated that top leadership commitment at
GE was essential to the success of Six Sigma deployment, since the effective
deployment depends heavily on how passionate leadership is in its support. Here
are ten steps suggested by Martin (2007) to form the LSS solution process: Align
project with strategic goals, ensure key people buy in, prove causal effects, improve
the MS, develop the improvement plan, integrate countermeasures to root causes,
standardize processes, train and audit, and apply controls. Also, the success factors
for LSS initiatives include: management support, effective communication,
choosing the right projects and people for deployment, and owning the character-
istics of an effective change program (Martin 2007).
George (2002) indicated that companies who started integrating Lean and Six
Sigma used three stages: the initiation of goals, the selection of people and projects,
and the implementation stage (which includes coaching and building a CI culture).
The LSS methodology should be holistic to encompass a wide variety of cultures
and enhance them to become a comprehensive CI culture. Also, he pointed out that
in order to leverage the LSS learning in an organization, there needs to be a strong
curriculum, means of interaction, technology exploitation, and standards’ docu-
mentation. Deployment plans of LSS include process focus, organization structure,
measures, rewards, and tools.
To succeed in integrating Lean with Six Sigma, organizations need to adopt a
holistic improvement method, where Lean and Six Sigma mutually reinforce each
other. Although DMAIC originated in Six Sigma, it can be generalized as an overall
framework for improvement (Snee and Hoerl 2007). Data showed that improve-
ments remain slow without the Six Sigma infrastructure (George 2002). Snee
(2004) indicated that Six Sigma has a unique characteristic of sequencing and
linking the tools into an overall approach. On the other hand, El-Haik and
Al-Aomar (2006) suggested that an integrated approach is expected to include the
use of current-state VSM as a platform for applying Six Sigma and Lean tools,
applying Six Sigma to adjust process parameters, integrating Lean techniques into
DMAIC, and using future-state VSM to change the process structure.
The model proposed in this chapter will not only follow the DMAIC structure
and use VSM, but will also aim at not using Six Sigma or Lean as a lead initiative.
Many researchers believe it is possible to integrate Lean and Six Sigma without
contradicting their core principles. However, there is no consensus on how the
integration should be done and there is no widely accepted integrated methodology
(Proudlove et al. 2008).
To summarize, here are some important recommendations to remember when
considering the integration approach for Six Sigma and Lean. It needs to:
• be holistic, have a strategic link, and use DMAIC framework as its core
structure.
• be tool-based using the best tool that suits the problem faced.
• use both methodologies simultaneously and not paralleled.
• integrate both in a balanced way without a dominant or subordinate one.
• be extended to suppliers and customers and use VSM as its focused platform.
• take into account the differences between the two methodologies.
• include a detailed body of knowledge and have a robust project selection
criteria.
• avoid sub-optimal process improvement and be result-focused.
• focus on all processes, production, or service and ensure people’s commitment.
• use an infrastructure of well-trained people representing all of the organization.
• own the characteristics of an effective change program and have a motivating
reward system, communication system, financial accountability, and visibility.
• have a supporting structure of MSs including information technology, control
application, sales, marketing, SC, and standardization systems.
4.3 Benefits of the Integration
The integration of Lean and Six Sigma is the solution to overcome the shortcom-
ings of each. It is the way for organizations to increase their potential improvement
(Bhuiyan and Baghel 2005). This is of significance because a lot of companies are
only applying one of the two methodologies without realizing that great benefits lie
in what the other methodology can achieve. Snee and Hoerl (2007) concluded that
drawing on both simultaneously is the way to achieve higher rates of improvement.
Also, Smith (2003) has mentioned that the combination of the two leads to
achieving CI. The integration of Six Sigma and Lean helps companies achieve zero
defects and fast delivery at low cost. A more detailed description of this integration
is needed in order for organizations to succeed in exceeding future customer
demands (Anderson et al. 2006).
LSS addresses issues that are overlooked by Lean and Six Sigma when applied
individually, such as the process steps that should be tackled first and the order of
4.3 Benefits of the Integration 57
what to apply first at what extent; it identifies the ways to achieve significant
simultaneous cost, quality, variability, and lead time improvements (Bhuiyan and
Baghel 2005; Lachica 2007; Lean Sigma Institute 2008).
According to Byrne et al. (2007), consultants from IBM have analyzed results
from several leading companies implementing LSS and found that some companies
have achieved impressive results in the past five years. Drawing on the principles,
tools, and philosophies of both methodologies has enabled them to produce
breakthrough innovations that resulted in profound business improvements (Byrne
et al. 2007). The integration of the industrial engineering tools of Lean with the
statistical tools of Six Sigma provides an operational excellence methodology
(LSS) and represents a new wave of QM evolution (Basu 2004).
LSS can help achieve a better system-level performance by improving quality and
accuracy measures of products and processes (El-Haik and Al-Aomar 2006). One of
the critical requirements to succeed in CI efforts at an organization is the availability
of a common set of problem-solving tools (Chapman and Hyland 1997). This can be
effectively achieved through the integration of Lean and Six Sigma which provides a
suitable toolkit for different production environments, whether uniform or variable.
The CI concepts within LSS can be used to evaluate production processes as well as
to assess the root causes of variation and corrective actions (Chen and Lyu 2009).
The goal of LSS initiatives is to transform organizations from separate reactive
operations which are functionally oriented into cross-functional process-focused
organizations. The result will be a customer-focused, employee-empowered, and
flexible organization (Martin 2007). LSS is a key enabler of the corporate strategy,
driven by the customer and business needs, to achieve competitive advantage
(George 2002). It can achieve faster improvements at less cost (Bogart 2007).
A LSS model can help achieve measurable improvement results as in Xerox (Xerox
Consulting 2008). Appendix A provides practical studies of LSS at real industries
(Sects. A.1, A.2, and A.3).
In addition to the benefits mentioned above, LSS encourages the use of a
common vision, language, and tool package suitable for various problems. The
integrated approach results in less efforts and confusion on the side of CI practi-
tioners who may feel they have to drop certain Six Sigma projects in favor of some
Lean projects, especially when introducing Lean to an organization that already
applies Six Sigma.
4.4 Similarities and Differences of Six Sigma and Lean
To understand how to integrate Six Sigma and Lean, they need to be compared so
that their similarities and differences can be learned. Based on an extensive liter-
ature review and the author’s own experience, a comprehensive and appropriate
basis for comparison utilizing 41 dimensions is considered here. Yang (2004) put
together 12 dimensions that were used in the comparison between TQM and
GE-Six Sigma. Tables 4.1 and 4.2 use 29 additional dimensions (total of 41) for the
Table 4.1 Similarities and relationship between Six Sigma and Lean
Six Sigma Lean Notes
1. Development – Motorola, mid-1980s – Toyota in the 1970s by – Both share same origin
by B. Smith (Devane Ohno based on the (quality evolution, Japan,
2004) with the teachings of Ford, after World War II
participation of W. Smith Japanese Experts, and (Anderson et al. 2006)
(Kumar et al. 2008) and others (Holweg 2007) – Both have roots traced
Harry (Harry and – IMVP researchers back to TQM (Upton and
Schroeder 2000) called it Lean, late 1980s Cox 2008)
– Later developed by GE (Devane 2004) – The evolution of LSS
– Evolved from a quality – Evolved to Lean started in the 2000s
to a business program enterprise from Lean (Byrne et al. 2007)
(Ricondo and Viles 2005) production (Ricondo and
Viles 2005)
2. Principles – VOC, financial impact, – Provide customers with – Both principles are
and defect elimination required value, quality, embedded in TQM
(Yang 2004). and quantity on time (Sheehy et al. 2002) and
– Based on teachings of – Womack and Jones: could be seen as concepts
Deming (Maleyeff and Identify value from the supporting TQM aims
Kaminsky 2002), customer view, map – TQM can be thought of
capability and stability current activities, make as an umbrella
– DMAIC, CTQ and the value flow, pull from encompassing business
COPQ (Han and Lee the supplier and perfect activities with LSS as the
2002) continuously (Bhuiyan pillar for the structure
– Aligning customer and Baghel 2005; Hines – The five principles of
needs with goals, et al. 2004) Lean resemble very much
obtaining necessary – Lean is supported by a the QI process developed
resources to lead change, base of industrial by Motorola, called the
using standard engineering (Dong 1995) six steps to Six Sigma
measurements and (Dahlgaard and
appropriate metrics, Dahlgaard-Park 2006)
deploying teams, and – Devane (2004) listed
setting stretch goals seven key LSS concepts:
(Friday-Stroud and VOC, Six Sigma metric,
Sutterfield 2007) waste elimination and
variation, process focus,
VSM focus and DMAIC
3. Leadership – Uses a top-down – Top-down focusing on – Both emphasize
approach trusting people skills and support of top
empowering management (Yang
2004)
4. Features – Uses a project – A project management – Both have a project
management approach approach with an management approach
with an improvement implementation plan put (Anderson et al. 2006)
plan from the Improve by team during future based on teams lead by
phase VSM change leaders; both
involve brainstorming,
planning, and executing
5. Staff roles – Black Belt, process – Kaizen leader, value
owner, and Master Black stream owner and Sensei
Belt
4.4 Similarities and Differences of Six Sigma and Lean 59
Table 4.2 Differences and relationship between Six Sigma and Lean
6. Definition – A collection of – Liker perceived it as – George defines LSS
process improvement a philosophy aimed at as a methodology that
tools used reducing the time from helps companies
systematically in a order to delivery by achieve better cost,
series of projects to eliminating waste quality, speed,
achieve high levels of (Devane 2004) customer satisfaction,
stability (Experts – A culture of and higher rates of
Archive Questions improvement (Huang improvement (George
2007) and Liu 2005) 2002)
7. Complexity – More scientific, – Much simpler – It is claimed that
data-based and methodology that is Lean is art whereas Six
structured approach to easier to understand Sigma is science;
process control, quality and implement however, there is an art
building (Yang 2004), and science element in
and problem solving both
– Both use software
packages that make
them easier to
implement
8. View – Includes two – A well-established
dimensions of management concept
philosophy (or (Kollberg et al. 2007)
management) and – Described as
methodology (or philosophy
analysis) (Hwang – Socio-technical
2006) system (Shah and Ward
2007)
– World-class
operating principles
(Hoerl 2004)
– Direction rather than
a state to reach to
(Devane 2004)
9. Operation – Lead by the Belt with – More emphasis on – It is argued Lean is
limited involvement of heavier involvement of more suitable for blue
others all people collar and Six Sigma is
for white collar
– An integrated
approach should
target all people and
concerns
10. Teams – Uses individual – Grouping of teams – Value stream owners
teams (Goh and Xie – More emphasis on work across
2004) cross-functional departments
teamwork – Belts may or not
(scope is usually
narrower)
11. Inventory – Not necessarily a – A waste that needs to – Waste is classified
focus (Raisinghani be minimized into certain types in
et al. 2005) Lean clarified better
than in Six Sigma
(continued)

12. Focus – Key processes driven – Major end-to-end – Lean focuses on
by VOC (Yang 2004) core business processes customer value; Six
– Process alignment using product family Sigma focuses on CTQ
(Anand et al. 2007) matrix (Proudlove et al. 2008)
– Statistical control, – Different than Six – Both focus on
stability, accuracy and Sigma in terms of focus customer satisfaction
defects (El-Haik and and better financial
– Not always on flow Al-Aomar 2006) results (Anderson et al.
optimization (Ferng – Flow and speed of 2006)
and Price 2005) information or products – Both work on speed
– Becoming rigorous – Learning to see and variation at
(Proudlove et al. 2008) (Proudlove et al. 2008) different levels which
– Process effectiveness – System efficiency stresses the idea of
integration
– Six Sigma focuses on
controls to end
projects, while Lean
focuses on ongoing
future VSM
– There is more focus
on visual workplace
(Antony et al. 2003)
– A lean plant is
recognized easier than
a six sigma plant (Balle
and Balle 2008)
13. Gap – Some organizations – Uses VSM as a way – Both, however, lack
Identification use balanced score to understand the VOC a formal link with
cards that show gaps (Snee 2005) strategic planning and
using key performance policy deployment
indicator s (Bhuiyan and Baghel
2005)
14. Practices – Described as a – Uses VSM of current – Both apply to
well-structured CI and future phases and production and
approach following Kaizen events business processes
DMAIC phases (El-Haik and
Al-Aomar 2006)
– Both are
state-of-the-art
(Arnheiter and
Maleyeff 2005) proven
methodologies
15. Production – Focuses on – Focuses on satisfying – Overproduction
increasing productivity customer demand and (often rewarded in Six
increasing capacity Sigma) is a waste in
Lean like inventory.
– Lean is preferable to
mass production
(producing more often
increases waiting times,
work imbalance and
prevents product flow)
(continued)

16. Design – Uses DMADV or – Focused more on – Six Sigma uses
DSFSS for the design production processes DFSS or DMADV for
of new products or not new product design product design,
processes (Reichhart and Holweg whereas Lean uses
2007); uses VSM to other tools (Upton and
design a new enterprise Cox 2008)
– Lean principles apply
to new product
development (Oliver
et al. 2007)
17. Scope – Value-adding – Larger waste – Both focus on
process step (Snee and between processes and process approach
Hoerl 2007) overall value-added (Ricondo and Viles
– Improving a process content 2005) but Lean scope
without asking why – Improves product is usually wider
it exists at all (Bevan flow speed to satisfy – Optimizing a system
et al. 2006) customers of processes is superior
– Optimizes – Uses higher-level to sub-optimizing a
department local VSM to see an process that may or
performance end-to-end system may not lead to overall
(Arnheiter and – System level system improvement
Maleyeff 2005) optimization (Oliver – Six Sigma needs the
– Performance target et al. 2007) addition of a system
for single critical – Optimizes overall perspective to avoid
quality characteristic VSM performance local sub-optimization
(Banuelas and (Arnheiter and (Goh and Xie 2004)
Antony 2002) Maleyeff 2005) and which is something that
– Applied downstream lead by CEOs Lean can help with
and lead by local – Provides road maps – Six Sigma looks at
champions (Goh and to transform operations steps whereas Lean
Xie 2004) (Balle and Balle 2008) looks at a whole
– Local benefits (Balle system of steps;
and Balle 2008) however, Six Sigma
tools can also be
applied to system level
improvements where
the measures are
time-based, such as
lead time and cycle
time (El-Haik and
Al-Aomar 2006)
– It is argued Lean
VSM focuses on
horizontal direction
and Six Sigma focuses
on vertical
(continued)

18. Techniques – Tools are analytical, – Tools are mainly – A lot of tools and
statistical, and analytical (Anderson techniques are
advanced statistical et al. 2006); no practice interchanged
(Anderson et al. 2006) linking quality and between the two
mathematics to (McAdam and
diagnose problems Donegan 2003)
(Devane 2004) but uses – Both criticized for
basic formulas to focusing on outdated
identify demand and processes and
other parameters metrics (Bevan et al.
2006)
– Both are different in
terms of technique
(El-Haik and
Al-Aomar 2006)
19. Mapping tools – Uses SIPOC – Uses VSM for – Lean uses VSM
high-level map high-level maps (which which is static in
(including CTQ) and includes valuable nature unlike
low-level process information and data) simulation in Six
flowcharts and process flowcharts Sigma that is more
for low-level mapping suitable for dynamic
environments (Lian
and Landeghem
2007)
20. Execution – Rule-based and – Uses a
procedural (Goh and knowledge-based
Xie 2004) tentative execution
21. Analysis – Focuses on extensive – More bias toward – However, Six Sigma
versus action data analysis quick action; has rapid improvement
effectively promotes CI techniques such as
using Kaizen events workout at GE and
– More revolutionary Lean has some data
thinking analysis tools
(Proudlove et al. 2008)
22. Tools – DOE, hypotheses – Kaizen events, visual – Both use
Examples testing and MSA workplace, Kanbans, mistake-proofing
5S, etc. (Bhuiyan and Baghel
2005) as one of the
common tools
23. Software – Uses Minitab – Microsoft Visio and
Excel
24. Certification – To be certified, a – To be certified, a – LSS Belts need to
Green or Black Belt Lean facilitator needs enhance their
needs to achieve the to lead an end-to-end facilitation and change
financial goals of the system change from leadership skills as they
project done during current to future state are expected to expand
training using VSM and Kaizen their teams to involve
– Better setup and blitz more people in their
spread projects
(continued)

25. Training – Structured and – Costs less money to – Antony (2006) has
focused on Belts (Basu train somebody and indicated that the start
2004) who create an targets almost everyone up of a Six Sigma
implementation in the organization program in an
infrastructure(Snee – Lean drives superior organization might be
2004) organizational learning costly especially for
– Less focus on wide (Pil and Fujimoto small- and
teams 2007) medium-size
– More intensity in the organizations (which is
training of full-time not the case for VSM
improvement in Lean)
individuals (Schroeder – Six Sigma draws
et al. 2008) more from quantitative
– Some organizations science, whereas Lean
started setting up draws more from
introductory White and behavioural science
Yellow Belt levels to when looking at the
target all people training and
certification
requirements of some
organizations
– LSS training need to
be integrated where
one methodology is
taught and not two
26. Problems – Problems are of – Seen from a high – Six Sigma suits
typically deeper level level unknown solution
and more complex – VSM helps solve a problems; in Lean,
lot of low-level solution is already
problems formed (Hoerl 2004);
both deal with different
problem levels
27. Rewards – Belts are usually – Bonuses are tied to – There is more
explicitly recognized project results, but it is incentives and career
and rewarded with more challenging to development focus in
bonuses and quantify project Six Sigma (Upton and
promotions based on savings as they may Cox 2008)
project results (Yang take longer times or be
2004); however, they soft
may risk missing the – Proper low-level
wider view where their metric may not be
projects success may easily found and
not be of benefit (Goh higher-level metrics
and Xie 2004) as the may be influenced by
critical problem may other non-controllable
lie elsewhere factors
– Group celebrations
occur at end of Kaizens
(continued)

28. How change is – Change is led by – Change is led by
lead vision as in the initial vision as in future
stage of choosing a VSM and solutions are
target while preparing a usually tried and tested
project charter and (Proudlove et al. 2008)
solutions are not – Skepticism exists
usually tried before about the effect on
people
29. Change – Main change – Main obstacle is – Success of both
obstacles obstacle is the lack of culture requires cultural
understanding – Kaizen events create change
– Success depends on rapid short-term – Lean requires
skills of Belts to create changes overcoming the
value and diligence – Success depends on paradigm of mass
(Goh and Xie 2004) team’s mind-set and to production (Ricondo
with less focus on the create value and Viles 2005)
team members who – Very important to – It is less difficult to
meet for few times empower, reengineer and evaluate
during projects communicate, coach, break-up of an
and listen (Devane organization using Six
2004) Sigma as the team is
– Resistance is less if more independent of
people feel they are the processes under
involved consideration (Hwang
2006)
– Choosing a
cross-functional team
representing all process
steps is a strong asset
for successful change
in Lean
30. Link to – Targets supplier only – Engages suppliers, – Linking Six Sigma to
suppliers if they are CTQ of helps them improve suppliers was identified
process under (Basu 2004), certifies as a success factor
investigation them, and cooperates needed for its
(Schroeder et al. 2008) with a few strategic implementation
partners (Banuelas and Antony
2002); however, Lean
generally focuses more
on them
31. Duration – 3 to 4 months per – Typically takes
project or more (Hoerl 6 months per VSM
2004) migration
(continued)

32. Financial – Results are tangible – Results can be – Both result in quick
savings (Goh and Xie 2004) intangible initial returns followed
– Less challenging to – More challenging to by incremental returns
quantify savings and quantify savings (Bhuiyan et al. 2006)
introduce incentives – More soft part-time
– Tracks savings on a savings
project by project level – A different look at
(Schroeder et al. 2008) cost savings and
inventory than in
traditional financial
systems (Devane 2004)
33. Time to see – No quick financial – Takes less time to see
results gain is realized due to improvement changes
time required for but may take longer
learning and applying time to see it
(Devane 2004) financially
– Changes in a process – Non-controllable
may not show any factors may cause
financial gain when project metrics to
looking at the system worsen despite
improvement
34. Culture – Sets up a culture that – Sets up a waste – Lean engages people
focuses on elimination culture into CI, focuses on
improvement of engaging all people to teamwork and seeing
processes to achieve focus on activities more than one’s task,
less defects and better adding value from the training people to see
financial gains customers’ view waste, finds its causes,
and empowers them to
implement changes
– Six Sigma
encourages a CI culture
using an approach of a
project after another
35. Measures – Measures are – Primarily simple, – There is more focus
primarily financial and non-financial and on bottom line results
cost-oriented operational in Six Sigma (Snee
– Time-based 2004)
measures are essential
(El-Haik and
Al-Aomar 2006)
36. Shortcoming – Short of 3 desirable – Processes are not
or desirable Lean characteristics: no statistically
direct attention to controlled, no focus
speed or inventory and on variation within
no quick financial gain measurement
due to time required for systems and no
learning and applying practice linking
(Devane, 2004) quality and
mathematics to
diagnose problems
(Devane 2004)
(continued)

37. Criticism – Not focusing on – Putting lots of – Both focus on
people and culture pressure on people outdated processes and
(Proudlove et al. 2008), (Yusuf and Adeleye metrics (Bevan et al.
may be challenging to 2002); however, does a 2006)
find in expensive better job in engaging – Both lack a formal
solutions and data people link with strategic
needed for analysis – Provides more planning and policy
(Antony 2006) principles than tools or deployment (Bhuiyan
– Over detailed, methods (Hoerl 2004) and Baghel 2005)
aiming at an absolute – In the house of
goal that is not always competitiveness
appropriate (Bevan proposed by Kovach
et al. 2006), difficult to et al. (2005), it is
stick with the rigor of claimed that both are
the approach and not enough as they fail
focusing on tools more to deal with innovation
than problems and flexibility and thus
(Proudlove et al. 2008) they need DFSS and
– Long-term shift of agile manufacturing,
(1.5 r) in process mean respectively
found in Motorola; not
all processes behave in
such a way
38. COPQ versus – The American – Seven types of waste: – Reprioritization and
waste categories Society for Quality over-production, people’s skills are
(ASQ) recognized four waiting, transportation, sometimes added to the
categories for COPQ: inappropriate list of wastes in Lean
appraisal, prevention, processing, inventory,
internal and external unnecessary motions
failure (Sower et al. and defects (Devane
2007) 2004)
39. COPQ versus – COPQ is between – Waste may be 70%
waste % 20% and 40% of total or more of resources
revenue which makes it (El-Haik and
a very essential concept Al-Aomar 2006); 95%
(Han and Lee 2002) of total lead time is
wasteful waiting
(George 2002)
40. Project – The rights reside – VSM including – In LSS, project
Selection with management to numerous product selection starts with the
ensure financial and families is selected; proper selection of
strategic implications VSM results in projects VSM with biggest rate
are considered such as Kaizen events, of return on invested
(Schroeder et al. 2008) Six Sigma projects, resources (George
just-do-it, etc. 2002)
– A LSS model
presented in (Kiemele
2005) uses VSM as a
trigger for project
selection
(continued)

41. Results – Examples: reduction – Some examples are: – Both share same
of defects, higher reduction of inventory, objective of solving
efficiency and higher lead time, cycle time problems, improving
recovery and waste, and current performance
– Uses Sigma-level improvement of people (El-Haik and
metric to evaluate morale Al-Aomar 2006), and
process capability reducing waste and
– Has a better cycle times (Snee and
effectiveness record Hoerl 2007)
(Cheng 2008) – Similar to Lean, Six
– Helped reduce Sigma projects can
defects and operation improve process cycle
costs and increase time, but Lean also
shareholder and improves total Lead
customer value time
(Antony 2008) – Three most important
– GE claimed Six Lean indicators are:
Sigma savings of inventory turns, lead
hundreds of millions of time, and percentage of
dollars and this success documented production
helped spread it procedures (Bhasin and
(Raisinghani et al. Burcher 2006)
2005) – Experience showed
that combining the two
can help companies
reduce up to 80% of
lead time, 20% of
quality and overhead
costs, and improve
over 99% on-time
delivery (George 2002)
comparison of Lean and Six Sigma. These tables include a review of their simi-
larities and differences, respectively.
As given in Table 4.1, there are many areas where Six Sigma and Lean share
common grounds in terms of: the origin or development, principles or concepts,
objectives or applications, leadership roles, staff roles and features or project
management approach. On the other hand, as given in Table 4.2, the differences
between the two methodologies lie in: the definition, complexity, focus, technique,
how they are viewed, what they are criticized for, approach to (operation or people
involvement, teams, mapping, processes and systems, certification, design, and
data), scope, identification of gaps, view of inventory and production, practices
(DMAIC versus VSM), COPQ versus waste types, COPQ versus waste percent-
ages, execution, analysis versus action, tools, software, rewards, training (cost and
material), change leadership and obstacles, project duration, project selection,
financial savings, time to see results, link to suppliers, culture, measures, nature of
problem level, shortcomings or desirable characteristics, and results. The integrated
approach has to take into account the differences between the two. However, even
in the dimensions where they are different, there are still some similarities as in the
focus on customer satisfaction. Also, there are many compatible areas where one of
them may excel and help the other. Thus, their integration is possible and beneficial.
4.5 Proposed Integrated Model for LSS
The integration of Lean and Six Sigma needs to achieve a full fusion of the Lean
philosophy of waste elimination with the Six Sigma mind-set of perfection at all
times. The five principles of Lean resemble DMAIC developed by Motorola
(Fig. 4.5). However, there seem to be some differences related to the third and
fourth principles of Lean (Dahlgaard and Dahlgaard-Park 2006). Even though,
these differences are expected to strengthen LSS as they provide additional ideas
and techniques to be used and exploited.
In Fig. 4.5, the relationship between the phases Six Sigma and Lean is
explained. The use of a single-headed arrow is chosen to emphasize that the pro-
posed model uses the holistic DMAIC structure for LSS. The Define phase is where
the understanding is formed for what is of value to the customer. The Lean VSM of
current state is a phase of measuring and analyzing, as data is collected to see how
the baseline looks like and the improvement ideas start to arise causing the analysis
to start. The integration of Lean brings the Measure and Analyze phases closer to
each other. The Improve phase is where the process is adjusted to improve the value
flow using the future-state VSM exercise as an example, and to introduce the
pulling concept. Finally, the Control phase is where the process is perfected by
introducing the procedures to ensure CI in the future.
Fig. 4.5 Lean and Six Sigma Lean Six Sigma

phases relationship
Identify Define
Map Measure
Flow Analyze
Pull Improve
Perfect Control
4.6 Detailed Description of the Integration 69
4.6 Detailed Description of the Integration
As recommended in the previous section, the integration of Six Sigma and Lean
into a common model requires the use of DMAIC as its core structure. DMAIC is
widely accepted as a comprehensive and robust structure, which is believed to be fit
for the integrated LSS model. The following paragraphs provide some examples
from the literature of LSS models, using various structured approaches, and a
discussion on how the LSS model proposed here builds on these models and
provides a detailed approach.
Byrne et al. (2007) proposed a model that is very similar to DMAIC but is called
DMEDI (i.e., Define, Measure, Explore, Develop, and Implement). Upton and Cox
(2008) proposed a LSS model that uses the CEIEC phases (i.e., Charter, Explore,
Imagineer, Execute, and Close) as a new and superior structure than DMAIC and
claimed that it keeps a bias toward quick action from Lean without risking the loss
of powerful analysis in Six Sigma. However, the DMAIC structure is believed to be
robust and flexible to contain the proper Lean tools. All tools are subject to be
chosen at a certain phase based on their suitability to the problem tackled. The use
of DMAIC is believed to simplify matters as it is already known and understood by
many CI practitioners.
The integration of Lean and Six Sigma can follow DMAIC road map, and it is
not necessary that each of these phases will be a major milestone in the project.
Some projects may focus mainly on fixing a measurement system, which means
there is no need to pass through the Analyze phase in depth. Other projects may
merely be solving a problem related to the lack of standard procedures, which
means the project does not require a lot of data analysis. Also, based on the nature
of the problem faced and the situation of the organization, current-state VSM can be
done within the Measure phase as a part of the understanding and measuring the
baseline performance. The future-state VSM can be done within the Analyze phase
to introduce a faster lead time and a better quality process. So, in some projects it is
expected that there will be more usage of Lean tools and it is not necessary to pass
slowly through each of the DMAIC phases.
Depending on the project, DMAIC may take different forms as there may be
different levels of detail in each of the phases. For example, it may take the form of
DMAIC when problems are mainly identified in the Define and Measure phases and
there is no need to do an extensive analysis. This will enable the LSS Belt or leader
to start implementing improvements since this project is mainly of the straight-
forward type that might be using more Lean tools. It is important to revise the
content of DMAIC and generalize it to include Lean tools in a balanced way with
Six Sigma tools. Thus, any project can be approached holistically using DMAIC
and the scope should lead to the proper tools.
Antony (2004) stressed that to succeed in a Six Sigma project, there needs to be
a proper answer to when, where, why, and how Six Sigma tools should be applied
as each plays a certain role that is specific to the problem in hand. So, including the
Lean toolkit is not simply about adding it to DMAIC, but it is about where the
different tools properly fit to achieve successful LSS deployment. This is a step in

the right direction to clarify some of the confusion about Lean tools and their
application as explained by (Pavnaskar et al. 2003). Lean is claimed to be relatively
stronger in the Improve and Control phases as opposed to the Measure and Analyze
phases in Six Sigma (Bevan et al. 2006). Most Lean tools fall under the Improve
and Control phases of DMAIC (Snee 2005). However, VSM is used earlier in the
Measure or Analyze phases and there is no reason why any CI tool can be used in
these phases once a quick-fix type of opportunity is identified.
GE proposed a model which includes the use of current and future VSM within
the Analyze and Improve phases of DMAIC where Lean is integrated within Six
Sigma using DM‘Lean’C (Moscone 2007). However, there is a lot of measuring
happening in the current-state VSM, and thus, it is recommended to include it in the
Measure phase instead. Xerox Consulting (2008) proposed a LSS model that uses
VSM in the Measure phase of DMAIC. According to George (2002) and El-Haik
and Al-Aomar (2006), the current-state VSM is used in Define and the future-state
VSM is used in Improve. However, it is recommended to introduce the theoretical
exercise of future-state VSM in Analyze, as no improvements have generally been
implemented yet. After that, the improvement plan, including the physical trans-
formation from the current to the future state, can be implemented in the Improve
phase.
Delphi is also another example of a company using the DMAIC structure for
LSS, where VSM is initially done in the Define phase. It is interesting to note that
Delphi proposes using Kaizen events earlier within DMAIC, to deal with basic
quick fixing and identify major opportunities, and also later to speed up the
implementation of the improvement plans (Mendoza 2007). Similarly, it is pro-
posed here to use Kaizen events in three phases: Measure, Improve, and Control. In
fact, the use of Kaizen events in the Measure phase is a step that can save a lot of
time when there are lots of improvements that do not require further analysis, and
thus do not have to wait for the Improve phase. Another use for it is when the
project team gets together for a concentrated period of time to conduct brain-
storming as opposed to wasting a lot of time in conducting multiple shorter sessions
intermittently. Also, the use of Kaizen events in the Improve phase can get
improvements implemented much faster. In the Control phase, Kaizen events help
in the quick implementation of visual controls as an example.
The Lean Sigma Institute (2008) proposed a model for LSS that follows DMAIC
and attempts to fit the Lean toolkit into it. It identifies the use of VSM as part of the
Measure phase, and it only lists few tools. Also, an attempt proposed by Mader
(2008) links Lean tools to DMAIC and identifies VSM as part of the Measure
phase. The American Society for Quality (2008) included Lean understanding as
part of the Six Sigma Black Belt body of knowledge. This is given in Table 4.3 as
an example of another attempt to fit Lean tools into DMAIC. To extend these
attempts, Table 4.4 presents a proposal of how Lean tools can fit into DMAIC. This
is more detailed than the ones discussed earlier, and it is believed to be more
balanced as it introduces a full package of Lean tools which can be used simul-
taneously with Six Sigma tools.
Table 4.3 Lean methodology understanding as part of the Six Sigma Black Belt body of
knowledge as adapted from (The American Society for Quality 2008)
Six Sigma project phase Applicable Lean tool or training topic
Define • Lean • LSS • Lean applications • Business processes and systems
Measure • Map the current-state value stream to identify waste
Analyze • Creating a Lean future-state value stream map and analyze waste
Improve • Eliminate Waste • Reduce cycle time
• Use Kaizen and Kaizen Blitz
Control • Visual controls • Total Productive Maintenance (TPM)
The proper selection and fit of Lean tools in each phase of DMAIC is critical to
success (El-Haik and Al-Aomar 2006). There had been different attempts by dif-
ferent researchers to do this. However, the following is a step-by-step description of
the proposed LSS DMAIC model which can be implemented by LSS Black Belts or
leaders as validated in Appendix A through the case studies in Sects. A.1, A.2, and
A.3:
I. Define
1. Identify opportunities, evaluate, and select the proper project and team.
2. Draft the project; develop the charter, schedule, financial analysis (COPQ
and waste), manage change and scope, and ongoing update (Table A.1).
3. Understand the customer requirements or the VOC:
• Use SIPOC to document the high-level process and the CTQ char-
acteristics (Table A.7); The SIPOC diagram also helps in preparing for
the VSM exercise by understanding the basic flow and who the
suppliers and customers are.
• Use the QFD matrix. Snee (2004) lists CTQ, QFD, and baseline in
Measure phase.
4. Identify the LSS suitable tools and approach to the selected project;
identify whether the focus is on product flow or variability.
II. Measure
5. Start process characterization and assemble the project metrics to
establish the baseline performance:
• Build the Measure phase data collection plan (especially for baseline
data).
• Understand the data and present it graphically using: control charts,
run charts, bar charts, pie charts, histograms, box plots, scatter dia-
grams, and Pareto charts, which are also used in other phases
(Figs. A.3, A.4, A.5, A.6, A.7, and A.8).
• Use descriptive statistics to measure the central location and vari-
ability of data.
Table 4.4 Six Sigma project phase and its applicable Lean tool or training topic
Six Sigma project Applicable Lean tool or training topic
phase
Define Introduce: • Lean • VSM •LSS
Introduce financial Analysis: • Identify waste • Quantify waste financially
Use SIPOC to understand the VOC and prepare for VSM. Introduce
process baseline performance including VSM metrics: • Inventory • Lead
time • Cycle time • Value-adding versus non-value-adding activities •
Down time
Identify the LSS suitable tools and approach to the selected project:
– Determine if the focus is on product flow or variability
Measure – Measure the baseline performance of the current process:
• Use the Lean metrics to measure the baseline
Map the current-state value stream
Identify waste and quantify it financially
Use Kaizen event approach and identify any quick improvement actions
Analyze Implement the quick hits as they do not require further analysis.
– Analyze the current-state VSM. For example:
• Analyze unnecessary steps and ways to minimize waste within and
between steps • Analyze flow of products and information • Analyze
Lead time, cycle times, and rework • Analyze down time and
changeover time
– Create a Lean future-state VSM to implement in the next phase
Improve Optimize and standardize the process
• Eliminate unnecessary steps or at least minimize waste within it
• Develop standard operating procedures and best practices
• Build an improvement implementation action plan
Use a Kaizen event to implement improvements. For example:
• Improve time and motion • Improve cell design, consider human factors
and work balance • Implement single-piece flow (reduce batching)
• Standardize processes • Use Kanban • Use 5S approach
• Use TPM and quick changeover approach
• Use mistake-proofing techniques • Use visual workplace approach
Control Design a control plan using the mistake-proofing approach • Design and
implement corrective actions
• Design an audit plan • Design visual work place controls
Train process owners on using control plans and monitor continuously
6. Measure process capability (indices, DPMO, and Sigma level) as in

Figure A.2.
7. View the current process:
• Map the current-state VSM to understand the value stream, identify
waste, and improve it (use value stream metrics which include
inventory, lead time, cycle time, value-adding versus non-value-
adding activities, and down time).
• Draw a process flowchart and document the current process.
8. Use a Kaizen event approach to implement quick hits and to conduct

brainstorming of potential causes.
9. Revise and detail the financial analysis including COPQ:
• Identify and financially quantify cost of variation and defects.
• Consider the eight wastes (the hidden factory, where unnecessary
work of repeated motion, measurements, and rework is happening, is
part of COPQ which is part of the measure phase. So, it makes sense
to introduce Lean thinking and the concept of waste as part of this
phase).
10. Identify and financially quantify waste (this will not be complete until
the VSM exercise is done, and it may include soft savings as well).
11. Use a Measurement System Analysis (MSA) to validate the reliability of
the data (study the variable gauge repeatability and reproducibility).
12. Use a cause and effect diagram to brainstorm potential variables or inputs
that affect the process output.
13. Identify potential process or design failures using Failure Mode and
Effect Analysis (FMEA) as shown in Table A.8.
14. Select the vital few potential inputs and identify the quick fixes that do
not require further analysis (also called just-do-it items).
III. Analyze
15. Implement the quick hits or quick improvement actions.
16. Build a data collection plan to analyze the potential inputs as in
Table A.9.
17. Use graphical tools to investigate the reasons for variation and differ-
ences in processes by different factors (e.g., use interval effects plots,
multivari charts, box plots, and other tools).
18. Develop hypotheses on the sources of variation and strength of rela-
tionships (using hypothesis tests, confidence intervals, and other statis-
tical tools).
19. Use correlation, regression, and analysis of variance (ANOVA) to study
how inputs relate to and impact outputs.
20. Identify a list of the few critical inputs or Key Process Input Variables
(KPIVs) to pass to the next phase for improvements.
21. Analyze the current-state VSM:
• Analyze unnecessary steps and ways to minimize waste within and
between steps.
• Analyze flow of products and information.
• Analyze lead time, cycle times, down time, changeover time, and
rework.
22. Create a future-state VSM to implement in next phase: Maximize the

value-added content and eliminate waste.
IV. Improve
23. Optimize the settings of the critical inputs and improve processes using
benchmarking, regression analysis, processes simulation, Design Of
Experiments (DOE) and other graphical tools such as box plots and
control charts.
24. Document the standard operating procedures and best practices including
the revised process map and MSA requirements.
25. Build an improvement implementation action plan to start the imple-
mentation of the recognized improvements (Table A.10).
26. Use a Kaizen event to implement improvements such as
• Improve time and motion, implement single-piece flow, and reduce
batching.
• Improve cell design, consider human factors and work balance. Lean
production smoothing by flow distribution and mixing can be used in
this phase (Snee 2005).
• Standardize processes and use Kanban systems.
• Use TPM and quick changeover, i.e., Single-Minute-Exchange-
of-Dies (SMED).
• Use the 5S approach, i.e., Sort, Set in order, Shine, Standardize, and
Sustain.
• Use mistake-proofing techniques and visual workplace approach.
V. Control
27. Validate and update FMEA, MSA, Sigma-level, capability, and control
charts.
28. Design a control plan using mistake-proofing approach and reassign
responsibility to process owner (Tables A.6 and A.12).
• Monitor the performance metrics (KPIVs and Key Process Output
Variables or KPOVs) to ensure they are in control and design visual
work place controls.
• Design an audit plan and corrective actions (a good practice in
auditing the project after it is done is that the Belt should conduct
reviews of results with the process owner after three, six, and twelve
months of the date when the project is handed over to the process
owner. Market demands and CTQ are dynamic (Antony 2004).
A review of CTQ can be done as part of the audit which may trigger
new opportunities).
29. Reconfirm the financial analysis:
• Conduct a cost-benefit analysis.
• Review and approve the analysis by finance.
30. Hand over responsibilities, train the process owner on using the control
plan, and monitor continuously.
It is expected that VSM will frequently result as a suitable tool at the start of LSS
implementation. However, the nature of the project should be what determines
whether VSM, or any other tool, is the suitable tool to use or not. Generally, it
makes sense to have VSM applied to all areas in the business to identify other
projects and opportunities. Nevertheless, the priority should be given to other tools
if they are more suitable to the selected project. For example, if the main issue
under investigation is a product quality-related and not a delivery-related, other
tools than VSM can be more suitable.
4.7 Discussion of Implementation
To highlight the additional benefits for the integration of Lean and Six Sigma, three
case studies were actually conducted and included in Appendix A. Case Study A.1
was conducted at Company C (a sawmill) to improve the utilization of logs/lumber
handling loaders and the storage area layout. From this study, it can be seen that the
additional benefit for the integration of Lean and Six Sigma lies in the use of the
LSS DMAIC approach, the use of LSS detailed and balanced body of knowledge
(which includes COPQ, wastes analysis, flow and time analysis as shown in
Figs. A.1 and Table A.3, variation analysis, Kaizen and brainstorming), and the use
of a common vision to eliminate practitioners’ confusion. The study recommended
the use of a new machine with a larger capacity than two of the existing machines.
Also, the storage areas were changed to reduce the waste in material handling time
(Table A.3). Improvement results and estimated costs and savings are summarized
in Tables A.4 and A.5. At the end of the implementation, the actual financial
savings were about $ 270,572.
Case Study A.2 was conducted at Company D (a planer-mill) to improve the
efficiency of the dressed lumber production line. This study shows that the addi-
tional benefit for the integration lies in the use of the LSS DMAIC approach, the
avoidance of sub-optimal local improvements, the use of LSS detailed and balanced
body of knowledge (which includes COPQ, wastes analysis, TPM, flow analysis of
material sorting as explained in Sect. A.2.3, time analysis, capability analysis as
shown in Fig. A.2, variation analysis, hypothesis testing as explained in Sect. A.2.3,
Kaizen, brainstorming, quick changeover and standardized procedures for better
coordination between operators), and the use of a common vision to eliminate
practitioners’ confusion. At the end of the implementation, the team improved the
efficiency from 67 to 75% (Fig. A.4) and the actual financial savings were about
$168,136.
Case Study A.3 was conducted at Company E (an installer of retail home
products) to improve the sales margin on labor related to the installation of home
products. From this study, it can be seen that the additional benefit for the
integration lies in the use of LSS DMAIC approach, and the use of LSS detailed
and balanced body of knowledge (which includes COPQ, wastes analysis, statistical
analysis, graphical analysis as shown in Fig. A.7 and A.8, visual boards, flow
analysis, mapping analysis, variation analysis, capability analysis, hypothesis
testing as given in Table A.9, Kaizen, brainstorming and standardized procedures
and responsibilities). At the end of the implementation, the team succeeded to
improve the labor margin from 21.5 to 26.5% and the total savings were about
$ 175,651.
4.8 LSS and Innovation
The introduction of innovation as an improvement and survival methodology is

getting more popular due to the collapse of various companies which lost their
market share to other companies which, in its turn, introduced unexpected,
value-adding, and innovative products. Thus, applying CI alone is not sufficient. On
the other hand, applying innovation approach alone has also its limitations.
The combination of LSS and Innovation leads to achieving CI and business
success. Their integration helps companies achieve incremental improvement and
survival of fierce competition. A program that engages the entire organization can
be created by combining the two methodologies. Drawing on the principles, tools,
and philosophies of both methodologies enables companies to produce break-
through improvements that result in profound business results. The integration of
LSS and Innovation will result in less confusion on the side of CI leaders and
employees in general.
Few studies exist on the relationship of quality improvement and Innovation
(Perdomo-Ortiz et al. 2006), which is not well understood (Riillo 2014). However,
Prajogo and Sohal (2003) found a positive relationship between quality manage-
ment and product innovation performance. Both are considered as important
aspects of business excellence. Some studies explained that quality improvement
provided a foundation for innovation (Ng. 2009).
To understand how to integrate LSS and Innovation, they first need to be
compared so that their similarities and differences can be learned. Based on an
extensive literature review and the authors’ own experience, a comprehensive and
appropriate basis for comparison between Innovation and LSS is considered in
Table 4.5 based on 32 dimensions.
As given in Table 4.5, there are many areas where LSS and Innovation share
common grounds in terms of: customer focus, continuity, motivation, design,
challenge, progress monitoring, project selection, value potential, platform,
approach (incremental), strategy, culture, leadership support, complexity, mutual
relationship, financial savings, incentives, performance target, suppliers, and pro-
duction. In addition, the differences between the two methodologies lie in: theory,
tools, supporting centers, training intensity, risk and cost, standards, training focus,
technological paradigm, change, results, development, and definition.
4.8 LSS and Innovation 77
Table 4.5 Comparison of LSS and Innovation

Dimension Lean Six Sigma Innovation Notes
Theory Is relying on mechanistic Is based more on
process-based CI organizational learning
(McAdam et al. 1998). It and appreciation of
draws from Behavioral human capital (McAdam,
and quantitative sciences et al. 1998). It is
dependent more on the
level of maturity in
quality journey
Principles/ Has a strong emphasis on It extends value beyond A common denominator
Focus on customer satisfaction. It customer expectations. It is customer value (Ng
customer focuses on Processes and creates new value, new 2009) and incremental
Products and dimension. It is mainly improvement/innovation
conformance to customer focusing on the 4Ps:
requirement Processes, Products,
Paradigm, and Position
(Francis and Bessant
2005). Radical innovation
enhances organizations
success beyond what
customers expect
Continuity Its emphasis is on It is a continuous cycle as Innovation cycle is more
continuous improvement disruption happens again comprehensive and takes
where future state to start a new cycle. As more time than the
becomes a new current some products reach relatively narrower scope
state maturity in the market, no for LSS
new investment may
bring favorable return.
This motivates the new
wave of innovation to
happen, but it may still
happen anytime
Motivation Its motivation is inspired It is driven by customer Both use employee
by tangible benefits value, competition, recognition, incentives,
(Motwani et al. 2004) entrepreneurship, and award systems
necessity, etc.
Design It utilizes the ‘design for It utilizes new product
six sigma (DFSS)’ development and radical
methodology (Zero innovation
defects) for incremental
improvement of existing
product and radical
creation of a new product
using quality function
deployment,
cross-functional teams,
etc.
(continued)

Tools It is not new in terms of It uses various tools at
the tools and techniques each stage. It may use
but it has a new tools like Theory of
deployment approach to Inventive Problem
process improvement Solving (TRIZ).
(Banuelas and Antony Generally more advanced
2002). It has additional software is used in design
data analysis tools (Kwak and prototyping for
and Anbari 2004) with innovation compared to
more statistical emphasis mainly using Minitab and
(Basu 2004) Visio for LSS
Paradigm of More organizations are More organizations are They differ. External help
supporting changing from seeking changing from a closed may include experts,
center external help into creating innovation paradigm of consultants, and
(functional internal centers. LSS uses internal innovation universities
team) an intra-organizational centers into an open
and cross-functional paradigm where they seek
improvement team help from external experts
(Cheng 2008) (Brix 2012)
Training LSS focuses on the In innovation, training
intensity intensity in the training of programs are shorter but
full-time improvement they target all people
individuals (Schroeder across the organization to
et al. 2008) learn and encourage
creativity
Risk and cost It is less risky and less It entails a danger of They differ
costly in general abrupt change and is also
criticized for being very
costly and risky
Standards It is used to achieve Innovation is about the Both are needed to
standards with less waste major deviation and achieve innovative
and variation. It focuses variation from standards. products with high
on consistent delivery of It creates new products or quality. Innovation is also
value processes which generate about improving upon the
new value (Ng 2009) existing standards
Challenge/ It is criticized for not It is generally not easily In both, success requires
criticism focusing on all people understood or cultural change (quality,
and culture (Linderman implemented. It can be customer value, learning,
et al. 2006). In the house costly and risky flexibility, collaboration,
of competitiveness and engagement)
proposed by Kovach et al.
(2005), it is claimed that
Lean and Six Sigma are
not enough as they fail to
deal with innovation and
flexibility and thus they
need DFSS and agile
manufacturing,
respectively
(continued)

Progress It has a mix of long and In innovation, monitoring
monitoring short term focus on depends on maturity of
progress toward goals the organization and its
(Motwani et al. 2004) process structure
Training focus It is a structured training It is a comprehensive Belt certification process
that is focused on Belts or approach that involves is well structured in LSS
levels (Basu 2004) which everyone using
create an infrastructure improvement teams that
for its implementation are sometimes in the form
(Terziovski 2006) without of a quality team
focusing on wide
participation (Schroeder
et al. 2008)
Project The selection rights reside It is similar to LSS Both use a funnel and
selection with management to evaluation criteria to
ensure that financial and priorities and select
strategic implications are projects. LSS uses value
considered (Schroeder stream mapping as a
et al. 2008) trigger
Value It helps in realizing value It creates a value potential
potential potential (extended beyond
expectation)
Technological It sticks to the It destroys and disrupts
paradigm technological paradigm technological paradigm as
in radical innovation
Platform Both LSS and Innovation It is similar to LSS
can share same platform
and thus be inter-applied
Approach/ It is a project-focused Innovation process model It is possible to take a
structure/ approach using DMAIC, under steady-state LSS approach towards the
techniques reinforcing Juran tenets (incremental innovation/ innovation process and an
(Basu 2004) and a continuous) conditions innovation approach
well-structured DMAIC includes: searching, towards the quality
road map for deployment selecting, implementing, process. Mistake proof is
(Terziovski 2006). A key and capturing phases. a good example of
strength in it is that it Phases also include innovative technique used
builds a quality ideation, prioritization, in LSS
improvement structure in pilot, and execution.
parallel to existing Another methodology
management structure used is TRIZ, creativity
(Linderman et al. 2006). matrix, Quality Function
VSM is often used as a Deployment (QFD),
platform for LSS Kepner Trego, etc.
improvement approach.
LSS uses statistical and
analytical tools
(continued)

Link to It provides alignment It can be linked to
strategy with organizational strategy but requires
strategic business strategy to be flexible and
objectives (Antony 2006) supporting in taking risk
culture It focuses on building It focuses on building a Organizations which have
continuous improvement flexible innovative culture a history of continuous
and a quality based improvement are more
culture likely to survive and build
a successful innovative
culture
Change In LSS, change is focused It uses learning and
on belts leading projects awards system
along with team
involvement
Leadership/ It uses a top-down It is similar to LSS
Management approach and depends on
Support management commitment
Complexity It is criticized for It is generally not well
difficulty to stick with the understood and depends
rigor of the approach on maturity of the
(Linderman et al. 2006) organization. The
approach is not easy to
implement (costly and
risky) and can result in
abrupt change
Mutual In LSS, breakthrough and DFSS shares some Radical innovation is
relationship incremental similarities with new different
improvements are similar product development in
to incremental innovation innovation
Financial It tracks cost savings on a Incremental and radical Innovation can have
savings project by project level innovation can generate social focus and LSS can
(Schroeder et al. 2008) financial reduction in cost focus on ‘loss to society.’
and/or increase in revenue Both focus on feasibility
and margin of projects
Incentives It is easy to have It often uses an award
incentives to pursue system
improvement (Terziovski
2006)
Performance In LSS, performance Performance target
target target applies to a single applies to single or more
critical quality critical characteristics
characteristic (Banuelas
and Antony 2002)
Suppliers Six Sigma targets Suppliers can play key
suppliers only if they are role in innovation
critical to the quality of
the process under
investigation (Schroeder
et al. 2008)
(continued)

Results It has a record of Radical innovation Similar goals especially
effectiveness (Cheng achieves unexpected for incremental
2008). Its objective is to results. It is decisive and innovation
solve problems and results in huge economic
achieve better quality, growth far above LSS
delivery and cost results
Development Six Sigma was developed First innovation patency
by Motorola, during the was registered in 1845
1980s by B. Smith (Tidd and Bessant 2013)
(Devane 2004). Lean was although innovation can
developed by Toyota in be traced back to many
the 1970s by Ohno based centuries ago
on the teachings of Ford,
Japanese Experts and
others (Holweg 2007)
until IMVP researchers
called it ‘Lean,’ around
the late 1980s (Devane
2004)
Definition It can be defined as a It can be defined as a
methodology that helps strategy used by
companies achieve better companies to deliver
cost, quality, speed, value to customers (Ng
customer satisfaction, and 2009), or the process of
higher rates of realizing new ideas which
improvement (George are made attractive to
2002) customers (McAdam
et al. 1998)
Production It focuses on variation It focuses on enhancing
reduction and efficiency both the process and the
product
The integrated approach has to take into account the differences between the two.
Thus, the integration of the two is possible and beneficial.
To summarize, here are some important recommendations to remember when
considering the integration approach for LSS and Innovation. It needs to:
• be holistic and use a common framework for all ideas to be captured and
prioritized.
• use a supporting structure in the organization and a well-established, systematic
process including management systems, implementation system, standardization
system, control application, information technology, sales, marketing, and supply
chain.
• utilize a flexible culture focused on customer value, everyday engagement, and
learning.
• use external resources as needed.
• dedicate and use an infrastructure of well-trained people representing all of the
organization.
Fig. 4.6 LSS and Innovation

phases relationship (Tidd and
Bessant 2013)
• ensure management, key people commitment, and alignment.

• have the criteria for robust project selection.
• have a reward system to publicize and celebrate results, motivation, effective
communication system, financial accountability, and visibility.
• be linked to suppliers and customers.
• encourage innovation through learning and teamwork to allow for collaborative
approach where people can build on each other ideas.
The four phases of innovation under steady-state conditions highly resemble the
LSS methodology phases. In Fig. 4.6, the relationship between LSS and Innovation
phases is explained. The Define phase is where the search for new ideas is con-
ducted. During the Measure and Analyze phases, the ideas are studied, prioritized,
and selected, while data is collected to see how feasible and possible the new ideas
are. The Improve phase is where the new idea is tested and enhanced. Finally, the
Control phase is where the new idea is captured and perfected by introducing
controls and procedures to ensure that the new potential is fully achieved.
In addition to many external resources, employees are a main source for innovative
ideas. Employee training to transfer the organizational culture into innovative and
value-adding culture can include change acceptance, creativity techniques, and the
flexibility to substitute, modify, eliminate, combine, or create new ideas. The criteria
used in evaluating the new ideas gathered from employees can be based on business
need, business impact, implementation cost, sustainability, originality (connection of
concepts or distinct ideas to create new solutions), ease of implementation, and fea-
sibility of implementation. Awards for creative employees and teams play a key role
in recognizing and motivating the organization towards more success.
4.9 LSS as an Enabler for Company-Wide Quality

(CWQ) Culture
For any organization to succeed in meeting high-quality standards, the existence of

CWQ culture is essential and this requires time and commitment. One key enabler
of that is the Lean Six Sigma Methodology. The proper implementation of this
methodology will enhance the CWQ culture and enable it to spread.
4.9 LSS as an Enabler for Company-Wide Quality (CWQ) Culture 83
A CWQ culture is an organizational value system that forms an environment

which is conducive to quality. Traditionally, there is a difference between the
described culture of an organization in terms of its vision, mission, principles, or
values, and the actual culture in terms of the thoughts, feelings, measures, controls,
or actions of employees. In a CWQ culture, slogans match with real behaviours or
actions. The term is derived from the Japanese CWQC system explained earlier in
Chap. 2.
For successful implementation of LSS, there needs to be an effective manage-
ment of culture change to transform the culture into CWQ culture.
LSS methodology can be embraced to create efficient and effective processes to
provide enhanced customer experience and value at reduced operational costs
(Antony et al. 2017a). A comprehensive study done by (Antony et al. 2017b) for
large manufacturing companies, listed benefits related to LSS implementation, such
as improved savings, customer satisfaction, cost, time, and inventory. According to
Albliwi et al. (2015), the top LSS benefits cited in the manufacturing sector
included improvement in profits, savings, customer satisfaction, cost, cycle time,
KPIs, defects, machine breakdown time, inventory, quality, and production
capacity. Also, the research done by Galdino de Freitas and Costa (2017) identified
many impacts of LSS over organizational sustainability such as improved quality,
waste, cost, employee satisfaction, inventory, innovation, and flexibility. The
critical success factors for LSS are consistent with the qualifications of successful
organizational change in terms of commitment, involvement, communication, and
teamwork (Pinedo-Cuenca et al. 2012). In their study, Brkic and Tomic (2016)
found that LSS dimensions, such DMAIC and Kanban positively influenced
employees’ performance in terms of satisfaction, commitment, and employee
turnover rate.
LSS can highly contribute to various criteria for performance excellence such as
management commitment, problem solving, measureable improvement, people
involvement and engagement, and training of dedicated resources (Corbett 2011).
Refining the culture can be enabled by the continuous improvement based on the
lessons learned from LSS projects. Table 4.6 below gives the CWQ culture aspects
and how LSS practices enable them to be fulfilled. The corresponding practices are
listed based on the authors’ own LSS practical experience and LSS previous
research.
Finally, it is suggested to perform a practical case study in the future, which can
be used to verify and quantify the LSS impact on CWQ culture. KPIs can be
selected and monitored to be used in the benchmarking process and in the com-
parison of the standing prior and after the implementation. Like many method-
ologies, for LSS to prevail, it has to be implemented properly. The increase in
global competition and the fast advancements in technology make it more decisive
for organizations to seek successful implementation of LSS. This requires further
evolution of LSS including effective training and international certification stan-
dards to shape a more robust and innovative CWQ culture. More effort is needed in
the future to explore this critical area, and more LSS practitioners need to share
their lessons learned, in failure and success.
Table 4.6 CWQ culture aspects and corresponding LSS practices

CWQ cultural How LSS enables it?
aspect
1 Pride LSS practitioners gain a sense of pride in own work quality,
contribution, and confidence upon successful completion of their
projects where the results get approved by management and financial
controllers and are reported in monetary value
2 Trust LSS enables a culture of trust through the firm dependence on
management by facts and data, not by feelings. Structured approach
with transparency in progress reporting and performance monitoring
also lead to trust. Practitioners focus more on teamwork and
celebration as well as change management aspects. LSS focuses on
trusting data to elevate arguments from personal level to
professional. One type of waste is about waste of human resources
due to lack of trust in their ability
3 Passion LSS focuses on quality and customer satisfaction as well as
employee satisfaction and thus instills the passion to quality and CI
in all practitioners as they realize the contribution value of their work
and through its proven success and structured approach
4 Engagement The change management aspects of LSS projects focus on the
human aspect of change, effective communication and leadership
commitment. The quick wins gained initially by successful Kaizen
events or incremental improvements have huge impact on people
mobilization. Lessons learned are shared to engage employees
across the organization
5 Motivation LSS is about improvement and focuses on the selection of the right
candidates to lead the projects and spread motivation through the
celebration of wins among teams, and the focus on the meaning of
work quality as well as waste and their impact on society. LSS
promotes a culture of encouragement not blame. It is both financial
and spiritual
6 Positive attitude LSS practitioners view problems as opportunities. LSS fosters the
right attitude by blaming the processes not the people and using data
to drive discussions and decisions
7 Empowerment LSS promotes reduction of waste and inspection or approvals as they
do not add value and encourages the empowerment of people so that
they and their managers can focus on adding value and advance in
their careers
8 Alignment LSS focuses on project selection and people efforts being aligned to
Strategic vision and direction with strong focus on teamwork and
organization improvement
9 Happiness LSS promotes customer and employee satisfaction, practitioners
success and happiness to society by reduction of waste and loss and
preservation of resources (sustainability)
10 Accountability LSS holds people accountable by measurement of performance
(KPIs) and COPQ. Management commitment for efforts and
resources is stressed for LSS success. The DMAIC approach itself is
emphasizing ‘Control’ which matches with Deming’s PDCA cycle
(continued)

CWQ cultural How LSS enables it?
aspect
11 Communication LSS is about change management, teams awareness, management
involvement (Gemba, projects progress, etc.). LSS focuses more on
soft skills of facilitation for project leaders and impact awareness.
Root cause to many opportunities lies in miscommunication.LSS
focuses on standardization
12 Transparency Structured approach and road map provides clarity for quality
improvement journey utilizing DMAIC and Value Stream Mapping
(VSM) approach
13 No Silos VSM approach within LSS ensures cross-functional team structure
and removes barriers
14 Empathy Customer focus (internal and external). No defect is allowed to pass
from one stage to another
15 Win-Win Success is celebrated by the LSS Green Belt as well as the team as a
whole. Celebration, certification for participation, effective training
(not one or three days for Green Belt) for the team and recognition of
efforts. For the stakeholders, high return on investment is well
proven in many companies. Also, suppliers and customers benefit
from the results of LSS projects
16 Value add LSS focuses on adding value and elimination of waste. Waste in all
of its types is a loss to society
17 Excellence LSS promotes CI as a way of life. Quality improvement is about
totality and comprehensiveness as it affects people, processes, and
products. LSS focuses on choosing the right people and the right
tools to achieve excellence
18 Flexibility LSS is flexible and applicable to manufacturing, transactional,
service, government sectors, etc. Also, LSS promotes change
acceptance and continuous pursuit of perfection and new best
practices and the acceptance of possible failure when trying new
ideas for improvement
19 Innovation LSS promotes experimentation and improvement whether
incremental or radical and thus enhances innovation with its project
selection approach and design for Six Sigma and waste reduction
20 Responsibility LSS promotes clear commitment at all levels of an organization
towards all stakeholders and society. It focuses on waste elimination,
sustainability, and the awareness not to pass defects downstream
In this chapter, a review of the available literature on Lean and Six Sigma was
presented, followed by a discussion of the benefits of this integration. This chapter
extended the previous works regarding these methodologies and proposed a
detailed description for their integration. More specifically, a thorough comparison
of Lean with Six Sigma is performed. It was shown that they share common
grounds in terms of: the origin or development, principles or concepts, objectives or

applications, leadership roles, staff roles and features, or project management
approach. On the other hand, the differences between the two lie in: the focus,
technique, how they are viewed and criticized, approach to (operation or people
involvement, teams, mapping, processes and systems, certification, design and
data), scope, identification of gaps, view of inventory and production, practices
(DMAIC versus VSM), COPQ versus waste types and percentages, definition,
execution, analysis versus action, tools, software, rewards, training (cost and
material), change leadership and obstacles, project duration, project selection,
financial savings, time to see results, link to suppliers, culture, measures, nature of
problem level, complexity, shortcomings or desirable characteristics and results.
Despite their differences, Six Sigma and Lean complete each other and can be
integrated to form a superior methodology (i.e., LSS). Thus, the integration of the
two is concluded to be possible and beneficial. In this chapter, a list of recom-
mendations was presented, which was later used as part of a guideline for devel-
oping the model. This list can be also considered when developing further
enhancing details on how this model functions in relation to other systems in an
organization (Chap. 8). For example, it is believed that LSS can fit under TQM
umbrella and can be thought of as its extension. LSS encompasses a wide variety of
cultures and enhances them toward a CI culture.
In sum, a description of the LSS model following DMAIC was presented to
explain the model in a detailed and balanced way. It is recommended that all projects
follow DMAIC and use the proper LSS tools in accordance with the problem and
circumstances faced. Finally, the effectiveness of LSS integration was verified by
conducting three practical case studies using data analysis (Appendix A).
The work described in this chapter in relation to the integration of Six Sigma and
Lean management was cited by various researchers such as Drohomeretski et al.
(2014), Albliwi et al. (2014), Singh and Singh (2012), Maleyeff et al. (2012),
Bhasin (2013), Albliwi et al. (2015), Kanigolla et al. (2014), Svensson et al. (2015),
Campos (2013), Lertwattanapongchai and Swierczek (2014), Garza-Reyes et al.
(2014), Ahmed et al. (2013), Bakri et al. (2012), Sagnak and Kazancoglu (2016),
Yadav and Desai (2016), Besseris (2014), Peteros and Maleyeff (2015), Chugani
et al. (2017), Philipsen and Littrell (2011), Sunder (2015), Powell et al. (2017),
Antony et al. (2016), Arif (2016), Habidin et al. (2016), Bakar et al. (2015),
Gutierrez-Gutierrez et al. (2016), Zhang et al. (2016), Longbottom and Modjahedi
(2013), Albliwi and Antony (2013), Douglas et al. (2015), Prashar (2017),
Ghodasara et al. (2017), Mohamed (2017), Taylor et al. (2015), Manzouri et al.
(2015), Ahmed et al. (2015), Mapikou and Roger (2017), Martensson et al. (2014),
Rathilall and Singh (2018), Venkateswaran (2016), Sunder et al. (2018), Amorim
et al. (2018), Madhani (2017), and Bakar et al. (2015).
Also, a comparison and an integration study of Lean Six Sigma with Innovation
were conducted. It was concluded that both can use same infrastructure of quality
teams and require supporting culture with top management commitment. Ideas can
be encouraged and captured, then prioritized and classified into LSS/incremental
innovation or radical innovation, which follows a structured approach to achieve

customer value and satisfaction.
CWQ presents a new quality culture evolution, which provides a solid foun-
dation for continuous improvement activities in an organization, to ensure that
proper alignment and communication exist, to optimize the resources and enhance
the performance of an organization.
Culture change management is an essential part of any LSS initiative. In its turn,
LSS can enable a CWQ culture to become engrained in the DNA of any organi-
zation by promoting various cultural aspects and fostering the right attitude through
many practices of LSS methodology. CWQ culture is a culture of alignment for
people and projects to the strategic objectives. Next, Chap. 5 investigates the
integration of Six Sigma with Kano model, QFD and other tools.1
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Chapter 5
Kano-Based Six Sigma
Abstract For any company, the continuous and timely development of new
products and services which include creative features that are expected to satisfy
customers is essential to stay competitive. Currently, companies are aiming not only
at satisfying customers but also at delighting them. In fact, some companies even
aim at winning their customers’ loyalty, such that they only buy their products and
recommend no other company to other potential customers. Thus, it is important to
attain a comprehensive and deep level of understanding for the dynamic require-
ments and needs of the customers. One of the key models that can be used to
achieve this goal is the Kano model. In this chapter, an integrated approach to
product development is proposed using a Kano-based Six Sigma, which utilizes Six
Sigma structure and Quality Function Deployment (QFD) . This approach will
contribute to the innovation of new and existing products or services.

Keywords Kano model Six Sigma Quality Function Deployment (QFD)

Quality Loss Function (QLF) Design for Six Sigma (DFSS) Continuous

Improvement (CI) Customer requirements Customer satisfaction

Product development Innovation
5.1 Introduction
Currently, companies are facing competition not only from local organizations but
also from across the globe. It is important to effectively identify customer needs and
be able to develop the products and market them in a short time through the SC.
Companies which efficiently introduce new products have a competitive advantage
over competition. However, there have been numerous failures in product devel-
opment efforts leading to a waste in time and resources. One of the reasons for this
is the lack of a structured and comprehensive process for product development that
utilizes powerful models and methodologies, such as Kano model, QFD, and Six
Sigma, as well as the principles of concurrent engineering including cross-
functional teams and timely communication.

https://doi.org/10.1007/978-3-319-99034-7_5
96 5 Kano-Based Six Sigma
Kano model and Six Sigma share the same goals of pursuing customer satis-
faction. Thus, their integration into a common model is possible and beneficial.
Kano model strengthens the Six Sigma approach and further enhances customers’
satisfaction. Six Sigma is used to achieve high levels of stability through the
reduction of variability in processes and products. This leads to an almost
defect-free level which is also the focus of the DFSS (or DMADV) approach to
building quality upstream into current and new product development. This level can
be essential to customers but may not always be economic. Therefore, it is
important to understand the customer needs and requirements to aim for and also to
understand the company’s own capabilities and costs.
In manufacturing, producers improve quality by reducing variability. In the
service sector, the service provider improves quality by satisfying the needs of
customers (Li 2003). Perceived quality is based on the customer opinion, and
customers fill products and services with their understanding of their goodness
(Foster 2007). Table 5.1 gives some common and different definitions for quality
which all share the broad emphasis on customer needs (Hassan et al. 2000).
Quality means providing customers with what they want and satisfying their
needs. However, due to the high competition in the global market, the target should
be to exceed satisfaction through the innovation of delighting product features
(attractive attributes) and exciting non-ordinary products and features. This will
shift customers from being satisfied, to being delighted and then to becoming loyal
as in Fig. 5.1.
Customer satisfaction provides an indication of the quality of a product. Highly
satisfied customers are more likely to be retained than the ones that are just satisfied.
There is a substantial difference in loyalty levels depending if the customer is
‘satisfied’ or ‘very satisfied’ (Finkelman and Goland 1990; Heskett et al. 1994).
Customer needs are becoming more sophisticated as a result of the global exposure
(Plesk 1997). Satisfaction levels differ by individual customers (Magnusson et al.
2003). The VOC is a description of what product problems the customer wants to
be solved (Matzler and Hinterhuber 1998). It has two types: qualitative, which
includes what customers want, and quantitative, which is about how they prioritize
their wants (Tan and Shen 2000). The American Marketing Association estimates
Table 5.1 Definitions of quality as adapted from (Hassan et al. 2000)

Quality guru/ Definition
authority
Juran Fitness for use and conformance to specifications (Juran Juran 1988)
Crosby Conformance to requirements (Crosby 1979)
Feigenbaum Total composite which will meet the expectations of customers
(Feigenbaum 1991)
Deming Targeting the present and future needs of the customer (Deming 1986)
Taguchi Loss to society (Taguchi 1986)
ISO 9000 Totality of products’ characteristics to satisfy the stated or implied needs
of the customers (ISO 9000, 1992)
5.1 Introduction 97
Fig. 5.1 Customer

satisfaction levels
that it costs five to six times more to attain a new customer than to keep one
(Matzler and Hinterhuber 1998). Moreover, the cost of customer satisfaction is
threatening around 8.5% of the total revenue according to the research by
(Hepworth 1997). Customer satisfaction represents a defensive strategy as opposed
to market share (offensive strategy). Market share improvements result from the
improvement of customer satisfaction rates (Matzler and Hinterhuber 1998).
The traditional way to design a product used to be based on trial and error
(Breyfogle 2003). Concurrent engineering has a cross-functional approach that
ensures the design is simultaneously considering different aspects as in the fol-
lowing examples: design for manufacturing, design for safety, design for main-
tainability, design for assembly, design for quality, design for performance, design
for reliability, etc. These design aspects consider voices of both, external and
internal customers.
In this chapter, an integrated approach to new product development is proposed
using a Kano-based Six Sigma approach, which utilizes the disciplined structure and
the different tools of Six Sigma. It also integrates tools such as SIPOC which is
important to understand the VOC, QLF (which is used to relate the product char-
acteristics to its quality performance, prioritize initiatives, and quantify quality loss
to society on an economic scale), QFD which is important to understand the tech-
nical requirements, Theory of Inventive Problem Solving (TRIZ or TIPS) which is
used to conceptualize solutions, Analytic Hierarchy Process (AHP) which is used in
alternatives’ selection, cause and effect diagram and FMEA which are used to
brainstorm the potential causes of problems and DOE which is used to optimize the
process response. This integrated approach represents a contribution to the existing
and new products’ innovation. The next section introduces Kano-based QLF.
5.2 Kano-Based Quality Loss Function (QLF)
Kano-based quality loss is a QLF generated based on Kano model. Cho and
Leonard (1997) presented that the quality loss has a minimum value of zero at the
customer-specified target. However, the Kano-based QLF proposed by
(Teeravaraprug 2002) has a zero value when the customers get what they asked for,
a positive value when they are not satisfied, and a negative one when they are
delighted. Similar to Taguchi’s three model types (Sect. 2.7), the proportional
attributes (Sect. 2.6 on Kano’s classification of product characteristics) can be
classified into three types: ‘the larger the better’ (where the customer feels neutral
and the loss is zero when the targeted value is fulfilled, delighted when exceeded,
and dissatisfied when the targeted value is not fulfilled), ‘the smaller the better’
(where the customer feels neutral when the targeted value is fulfilled, dissatisfied
when exceeded, and delighted when a lesser value than the targeted value is
achieved), and ‘the nominal the best’ (where the customer feels neutral when the
targeted value is fulfilled and dissatisfied when the targeted value is not fulfilled).
Figure 5.2a–c shows a set of QLFs for these three QLF types. There are three
factors needed to come up with an exact value for the QLF: the loss at any per-
formance point, the targeted value, and the functional style of loss. For example, in
‘the larger the better’ case, the loss is R at zero performance, the targeted value is T,
and the functional style is linear. The QLF for ‘the larger the better’ type can be
defined as:
LðyÞ ¼ Rððy=T Þ 1Þ ð5:1Þ
The other types can be approached in a similar way. The expected attributes and
the attractive attributes act as a go/no-go requirement. For the expected attributes,
when the characteristic exists, the customers feel neutral and the loss is zero,
whereas when the characteristic is absent, the customers feel dissatisfied and the
loss is positive (i.e., L = R if y exists, and 0 if absent). For the attractive attributes,
when the characteristic exists, the customers feel delighted and the loss is negative,
Fig. 5.2 Kano-based Taguchi loss functions as adapted from (Teeravaraprug 2002)
5.2 Kano-Based Quality Loss Function (QLF) 99
whereas when the characteristic is absent, the customers feel neutral and the loss is
zero (i.e., L = −R if y exists and 0 if absent). Figure 5.2d, e shows these two QLF
types. Kano-based QLFs offer more flexibility but restrain the traditional and
acceptable loss functions (Teeravaraprug 2002). Kano-based QLF can be used to
relate the product characteristics to its quality performance, prioritize initiatives,
and quantify the quality loss to society.
5.3 Examples of Some Integrated Approaches

from the Literature
According to Magnusson et al. (2003), Clausing (1984) presented an iterative

approach that can be used within DFSS for product development and it utilized Kano
model, TRIZ, and FMEA in three phases: product family, individual products, and
lower-level sub-systems. Shen et al. (2000) proposed an integrative approach to
product development using Kano model and QFD. The integration between QFD
and Kano model suggested by (Matzler and Hinterhuber 1998) is believed to have
benefits such as fewer launch problems, better communication between departments,
better competitive analysis, and better planning. Tan and Shen (2000) proposed
using an approximate transformation function based on Kano’s model, to calculate
an adjusted customer satisfaction improvement ratio within the QFD planning
matrix. This matrix reprioritized the customers’ attributes using an importance
adjustment technique based on Kano-category factors, not traditional factors.
In the QFD literature, Kano model is sometimes used to assign weights to the
different customer attributes. An adjusted importance factor of each requirement is
calculated by multiplying the raw importance factor by a weight. This weight or
rank is sometimes calculated using an AHP (Tan and Shen 2000). Lee and Huang
(2008) presented an integrative approach by incorporating the Kano model into
QFD and adjusting customer requirement weights to optimize the product design
and enhance customer satisfaction. Also, Tontini (2003) presented a modified Kano
approach which is integrated into QFD.
Besides integrating Kano model and QFD into Six Sigma, the proposed
approach presented next extends the previous works regarding these models. This
chapter presents a new description of the DFSS structured approach including a
simple way for calculating the degree of importance for customer requirements
using a Kano factor (K).
5.4 Integrated Approach
The model proposed in this section improves the implementation of different tools
and provides a structured step-by-step DFSS methodology for product develop-
ment. Also, management commitment and concurrent engineering are needed
as well as cross-functional teams to accelerate the time to deliver new products into
markets. Figure 5.3 shows a high-level map describing the proposed framework. In
addition, here are the phases of this proposed approach which follows the
well-structured DMADV framework and is demonstrated through the case study in
Appendix B.
5.4.1 Define
1. Identify opportunities and initial product modification ideas which can appear
due to reasons related to technology, market needs, competitors, user solutions,
own creativity, alliance, acquisition, licensing, etc. (Shen et al. 2000).
2. Identify existing customers (if the product already exists and major design
changes are required) and potential customers.
3. Evaluate risks and select the proper project. A selection matrix can be used to
list the customers and evaluate them against the different product modifications.
Fig. 5.3 Integrated model for Kano model-based Six Sigma (following DFSS)
5.4 Integrated Approach 101
4. Draft the project; charter, time line, financial case (COPQ and waste), and scope.
5. Understand customer requirements or VOC. Use SIPOC diagram to document
the high-level process where each process output should satisfy customer
expectations (Table B.1).
5.4.2 Measure
6. Identify the CTQ characteristics of the product so as to build the VOC into the
product (Table B.1). Customer needs and the VOC are identified through
interviews, market research, benchmarking, discussions, surveys, focus groups,
customer specifications, observations, reports, and warrantee claims. An affinity
diagram can be used initially to brainstorm customer needs and then organize
them into different groups.
7. Set up targets and specifications.
8. Prioritize the CTQ characteristics. Use the Kano model to gain a better under-
standing of what is critical to the customer (the different themes resulting from
customer needs brainstorming are Kano-categorized). Kano-based QLF can be
used here to relate the product characteristics to its quality performance and
quantify quality losses.
9. Rank the customer requirements’ importance using Kano Factor (Table B.2).
5.4.3 Analyze
10. Use the HOQ matrix to identify and to prioritize the key technical character-
istics (Fig. B.1).
11. Use the cause and effect diagram and FMEA to analyze the potential problems
associated with the key technical characteristics (Table B.4; Fig. B.3). These
tools can help ensure that the team has not missed any critical needs and they
can minimize the number of KPIVs.
12. Conceptualize solutions using tools such as TRIZ, and identify ‘how’ technical
characteristics or design challenges (the ‘what’s’) identified by HOQ can be
resolved. Also, identify new product features that will excite the customers.
13. Use a selection matrix (Table B.6), AHP, or conduct feasibility study to find the
best solution.
5.4.4 Design
14. Identify and prioritize process design changes.

15. Identify potential process or design failures using FMEA for a second time.
16. Design corrections resulting from FMEA are performed for the items that
represent the most critical risk. FMEA summarizes the risks to customers
through the design corrections for potential failures. TRIZ can also be used
after FMEA identifies failure modes to improve the design of new products.
17. Improve and optimize the chosen conceptual design by DOE. DOE is used to
tweak process parameters. The goal of DOE is to optimize input variable
settings to obtain the best output response. It can help in the understanding of
the sensitivity of the process and product characteristics, input and output
variables, and tolerances.
18. Optimize the settings of the critical inputs, and improve processes using
benchmarking, regression analysis, processes simulation, DOE, and other
graphical tools such as box plots and control charts.
5.4.5 Verify
19. Identify and prioritize the process control elements required.

20. Validate and test the controls and process and the product (Pilot test).
21. Establish continuous monitoring.
22. Launch and implement new design and new product.
Kano model strengthens DFSS and provides a clever approach for understanding
and measuring customer needs. To demonstrate the proposed Kano-based Six
Sigma model, a generic case study is presented in Appendix B. This case study uses
an example of Company F that buys rough green (wet) lumber from a sawmill. The
lumber is mainly dried and dressed before being delivered to a retailer. From this
study, it can be seen that the additional benefit for the integration of Kano model
and Six Sigma lies in the use of DFSS innovative approach (which utilizes
DMADV structure including various graphical and analytical tools of Six Sigma
such as the ones used in Fig. B.3 as well as Table B.4), the use of QFD to translate
customer requirements into technical characteristics (and their ranks) as given in
Table B.1, and the use of Kano model to deeply understand and quantify the
customer requirements utilizing Kano factor which helps in the calculation of an
adjusted degree of importance as given in Table B.2 and Fig. B.1.
In this chapter, an integrated approach for DFSS was proposed to help practitioners
strategically understand the VOC. It included the use of different powerful tools
such as Kano model, QFD, Taguchi’s QLF, TRIZ, AHP, DOE, and FMEA. All of
these tools are related and share common grounds in terms of solving customer
Fig. 5.4 Integrated

framework for Kano-based
Six Sigma (following DFSS)
problems to achieve customer satisfaction. They also complement each other and
can be integrated together, within DFSS, to form a better methodology as explained
in this chapter. Thus, the integration of these tools into the DFSS methodology is
concluded to be possible and beneficial. This chapter extended the previous works1
regarding these tools, included new ideas, and incorporated them in a new model.
Sriram and Thondiyath (2015) had cited the work described in this chapter.
Figure 5.4 shows a proposed high-level framework of the Kano-based Six
Sigma approach to new product innovation and development. Kano model lies in
the centre of the framework as it forms a basis for a profound understanding
customer needs. The DFSS methodology utilizes Deming’s PDCA cycle through
the DMADV phases for CI.
Kano model strengthens DFSS and brings an intelligent approach to under-
standing and prioritizing customer requirements. In addition, a generic case study is
used for demonstration purposes (Appendix B). This case study gives an example
of some of the steps in the proposed methodology to demonstrate how it can be
implemented. The next chapter discusses the implementation of LSS in SCM.
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Chapter 6
Implementing Lean Six Sigma in Supply
Chain Management
Abstract SCM is essential for any company in order to be able to survive the
increasing pressures of global competition. There have been continuous changes in
the manufacturing and service markets across the world which caused the SC
members to reassess their effectiveness individually and as a whole. SCM can
utilize the QM concepts as well as the LSS tools and CI principles to achieve high
levels of customer satisfaction regarding cost, quality, and delivery. Researchers
considered the integration of Lean and Six Sigma with SCM. This chapter extends
the previous works and proposes the implementation of LSS in SCM.

Keywords Supply Chain Management (SCM) Lean Six Sigma

Continuous Improvement (CI) Quality Management (QM) Just-In-Time (JIT)
Value Stream Mapping (VSM)
6.1 Introduction
SCM brings all trade partners together and focuses on an interorganizational per-
spective to improve efficiency and optimize efforts. This matches with Taguchi’s
principle of minimum loss to the society.
There is a direct relationship between CI, TQM, JIT, and SCM at the strategic
level (Kannan and Tan 2005). The understanding of SC dynamics or relationships is
a key driver of business performance. Also, focusing on SC and JIT characteristics
can help improve product quality (Tan et al. 2002). The key issue of how SCM
integrates with other operational performance initiatives, such as Lean, Six Sigma,
LSS, and TQM, is still being explored and developed (Ballou et al. 2000; Miller
2002).
SCM can utilize the JIT and LSS principles such as focusing on adding value to
customers, reducing defectives, streamlining value flow to customers, pulling
instead of pushing, choosing few best strategic suppliers, reducing inventory, waste
and improving on-time delivery, more frequent deliveries of less quantities and
delivery to point of use.

https://doi.org/10.1007/978-3-319-99034-7_6
106 6 Implementing Lean Six Sigma in Supply Chain Management
Improving SCM includes the focus on inventory, transportation costs, and the
SC partners. A trade-off needs to exist between the interrelated inventory and
transportation costs in order to achieve a higher reduction in total logistics costs
(Blumenfeld et al. 1987). A study of the US food industry indicated that an annual
waste of $30 billion resulted from the poor coordination among SC partners (Fisher
1997). One of the observations by Tan et al. (2002) indicated that a realistic
approach to SCM is to focus on immediate suppliers and customers. For example,
locating next to suppliers has a positive impact on the market share. Also, the
quality level is more important than the product price in the supplier evaluation
process. Baston and McGough (2007) indicated that Juran’s trilogy (Fig. 4.1)
consists of quality planning, QC, and QI which all apply to the supplier relations.
The next section discusses how QM relates to SCM.
6.2 SCM and QM
QM involves flows of material, information, funds, etc., through a SC. The SC

encourages the expansion of the vision of processes, including upstream and
downstream processes. It involves the integration of different functions, processes,
and quality dimensions which can be seen in Table 6.1. Across the SC process,
there are different perceptions of quality which are important to understand in order
to communicate properly and resolve differences. The QM-related activities which
are part of SCM can be classified into (Foster 2007):
a. Upstream activities which include supplier qualification (using grading ap-
proaches, such as ISO 9000: 2000 and acceptance sampling), supplier devel-
opment (including the use of electronic data interchange (EDI) to link customer
purchasing systems to supplier Enterprise Resource Planning (ERP) systems).
b. Core process activities including CI and VSM activities.
c. Downstream activities which include logistics, customer support, and after sale.
Table 6.1 Product and service quality dimensions as adapted from (Foster 2007)
Garvin’s product quality dimensions Service quality dimension
Performance Tangibles
Features Empathy
Reliability Service reliability
Conformance Assurance
Durability Responsiveness
Serviceability Availability
Aesthetics Professionalism
Perceived quality Timeliness
Completeness
Pleasantness
6.2 SCM and QM 107
Kanji (1998) proposed a Business Excellence (BE) model to satisfy the orga-
nizations’ need for a comprehensive and flexible framework to measure BE.
Utilizing that model, Kanji and Wong (1999) proposed a structured model for SCM
that is based on TQM principles. The next section discusses how LSS, which can be
considered as a QM and CI methodology, can be integrated with SCM.
6.3 SCM and LSS
SCM lacks analytical tools for problem solving and may not provide the flexibility
to adapt to SC complexity and variability that lies in the changing market segments
and demand (Amer et al. 2007). Some of the key goals for a successful organization
and its suppliers are to digitalize the transactional processes, to enhance the EDI
capabilities, and to eliminate wasteful activities and reduce the total SCM costs by
using CI methodologies and modern electronic systems (Dasgupta 2003). In what
follows, a discussion is presented of how different researchers considered the
integration of Lean and Six Sigma with SCM, respectively.
One of the important concepts of Lean, which is stressed in the enterprise VSM
exercises used to improve SC processes (Foster 2007), is seeing things from the
perspective of the whole enterprise SC and not the individual process or entity. For
example, rewarding a business entity or process for producing more than what the
next business entity in the SC requires (as a customer of the former entity) does not
generate any benefit for the SC from the whole SC perspective. On the contrary,
this creates more staged inventory and waste. LSS implementation in SCM
embraces the principles of JIT. Products need to be delivered on time, with the right
quality, the right quantity, and at low cost. JIT delivery which heavily depends on
suppliers is important for the success of JIT production. The Lean approach to SCM
can also be described as the Lean logistics approach aiming at reduction of
inventories, wastes, and lead times (Foster 2007).
Parveen and Rao (2009) indicated that there is a need for an integrated approach
to Lean manufacturing from the perspective of the Lean SC to achieve total lean-
ness across the SC. The nature of the market sector has a direct impact on the Lean
approach for any SC. Lean tends to increase demand stability by simplifying,
optimizing, and streamlining the SC. To quickly react to demand variations, it is
important to integrate sales and marketing with manufacturing to ensure effective
communication, and to design a flexible manufacturing system (Cochran et al.
2000). In order to overcome the conflict between Lean and highly variable demand,
Reichhart and Holweg (2007) recommended the use of market segmentation to
benefit from the stability of some customer segments or products. Bicheno et al.
(2001) indicated that the inconsistent performance of the SC they studied was
caused by demand variations, batching (which should be minimized according to
Lean and JIT principles), process instability, and delivery performance. It is rec-
ommended by (Parveen and Rao 2009) for Lean SC to consider the following:
• A collaboration between producers and retailers for setting maximum-profit

prices.
• An optimal integrated JIT inventory policy which takes into account CI, setup
cost reduction, and lead time reduction.
• An optimal cycle length and an optimal number of inspections using a
time-varying lot-size (or batch-size) approach in imperfect production processes
and considering CI and setup cost reduction.
• An optimal raw material ordering quantity, optimal finished product batch-size
and optimal number of Kanbans (for a multistage production system) for
production-delivery situations considering process inspection, restoration, and
rework.
• A SC coordination for pricing, order quantity, and investment decisions.
• The Economic Production Quantity (EPQ) models analysis.
• The analysis of rework and the number of shipments in a production system.
The Lean SC makes it economic to produce small amounts and consequently
allows producers to reduce inventory costs, reduce production costs, and satisfy
customer demands (Vonderembse et al. 2006).
In what follows, a discussion is presented of how different researchers consid-
ered the integration of Six Sigma with SCM. Integrating Six Sigma with SCM can
bring benefits such as the DMAIC project discipline, sustainability of results, a
well-established human resources framework using the belt system, and a quanti-
tative analysis strength (Yang et al. 2007). Three of the motivating reasons toward
the integration of Six Sigma and SCM are the versatility of the robust Six Sigma
metrics in performance measurement, the similarities between Six Sigma and SCM
(such as both being process approaches), and the research results indicating that
SCM can benefit from the implementation of QM principles (Dasgupta 2003).
Sanders and Hild (2000) warned against using Six Sigma metrics indiscrimi-
nately since there is a disadvantage in transforming the notion of Six Sigma process
from a management philosophy to numerical targets for individual processes. This
contradicts with Deming (1993) philosophy of eliminating numerical targets and
slogans. Managers need to spread the knowledge of Six Sigma in the right per-
spective to ensure that metrics are perceived as motivational opportunities for
improvement, not hardcore numerical targets (Dasgupta 2003). Also, metrics
should encourage the system perspective emphasized by SCM and VSM, not the
process perspective.
Dasgupta (2003) claimed that it is difficult to measure, monitor, and improve the
performance of a SC and its entities, only with the traditional strategic criteria such
as cycle times, lead times, delivery performance, total SCM costs, inventory levels,
rolled throughput yield. Thus, Dasgupta presented a structured methodology that
uses Six Sigma metrics which provide a common scale, such as defects per unit or
Sigma level.
After being dissatisfied with its Six Sigma and SCM efforts, Samsung used both
Six Sigma and SCM to enhance its operation and improve its efficiency (Samsung
2007). Six Sigma was used to organize the approach to SCM projects and ensure
6.3 SCM and LSS 109
that enough people were fully trained in SCM and quantitative data analysis. To
adapt the approach to support SCM, Samsung have modified DMADV into
DMAEV (i.e., Define, Measure, Analyze, Enable, and Verify). Samsung stressed
the organizational perspective for improvements as opposed to the local perspec-
tive, using KPIs to monitor improvements and using a systematic approach
(Samsung 2007). Training is an essential factor for succeeding in the integration of
Six Sigma and SCM as it helps establish an educated and committed workforce that
is willing to change and embrace the quality strategy.
Amer et al. (2007) proposed expanding DFSS (which provides means of creating
specific target metrics and a methodology for isolating where CI efforts should be
spent) to SC design. Their approach focused on using cross-functional teams to
understand the VOC and the Critical Customer Requirements (CCR) including
demand management.
In sum, different researchers considered the integration of Lean and Six Sigma
with SCM. However, this chapter extends the previous works and proposes the
implementation of LSS in SCM. Within LSS, Six Sigma tools ensure that products
are of high quality resulting from capable processes, and Lean tools including VSM
ensure the efficient flow through the SCM including inventories, schedules, demand
quantities. LSS tools in general aim at reducing costs, wastes, non-value-adding
activities and satisfying all customers across the SC. LSS encourages good rela-
tionships with customers and suppliers including partnership and problem solving.
In this chapter, the step-by-step approach of LSS DMAIC (which was explained in
detail in Sect. 4.6) is proposed to be implemented in SCM to improve the SCs using
tools such as VSM and COPQ. The suitability of these tools and methods in general
depends on understanding the methods and the application environment.
SCM can utilize the various LSS principles which ensure customer satisfaction
and the efficient flow through the SC. Appendix C provides a practical case study
from a real industry to validate the implementation of the LSS approach in SCM.
This empirical study was undertaken at Company G, which is a retailer of manu-
factured home products, to improve the performance of a Distribution Centre (DC).
It provides a description for all of the DMAIC phases. For example, Figs. C.1 and
C.2 illustrate the use of VSM in the Measure and Analyze phases of LSS for the
improvement of the SC. In addition, Table C.1 describes the improvement plan and
the end results of the implementation are described in the Control phase. At the end
of the implementation, the team succeeded to improve the receiving period from
two weeks late to a state of same day receiving (using a visual management pro-
cess), the filling rate of orders from retailers from 80 to 94%, and the picking rate
from 39 to about 70 line picks/operator/hour.
LSS and SCM share common grounds in terms of focusing on processes and
solving customer problems to achieve customer satisfaction. They also complete
each other and can be integrated together. This chapter extended the previous
works1 regarding these approaches and recommended the implementation of
LSS DMAIC to improve SCM.
LSS tools which include VSM ensure the efficient flow through the SCM
including inventories, schedules, demand quantities. SCM can utilize the LSS
principles, such as focusing on adding value to customers, reducing defectives and
wastes, streamlining value flow, and improving on-time delivery.
The implementation, management, and performance improvement of a SC are
not easy tasks. However, SCM can utilize the QM concepts, CI principles, and LSS
tools in order to achieve high levels of customer satisfaction regarding cost, quality,
and delivery. Zhang et al. (2016) had cited the work in this chapter among few
works related to using LSS in SC improvement. Also, Shokri (2017) had cited it
when discussing the benefits of LSS. The case study in Appendix C provides an
actual example of LSS implementation (including VSM as a key tool) to improve a
real SC. It validates the implementation and provides a description for all of the
DMAIC phases. It shows how SCM can utilize LSS in order to achieve high levels
of customer satisfaction (Appendix C). Next, Chap. 7 introduces the integration of
QM and CI methodologies with MSs. It presents the need for this integration and
describes some requirements for successful deployment of CI methodologies and
the benefit for the integration.
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Part III
Integrated Company-Wide Management
System (ICWMS)
Chapter 7
The Integration of QM and CI
Methodologies with MSs
Abstract For organizations to be successful, the use of well-structured MSs, QM

and methodologies for CI such as LSS is all essential. In many industries, various
MSs and CI methodologies are separately implemented, either formally or infor-
mally. The effective integration of MSs with QM and CI interventions ensures the
strategic alignment of all activities and provides an industry with a competitive
advantage. There is a genuine need for more research in these areas. Recently,
different MSs have gained more attention as they form a critical infrastructure for
improving and controlling the different operation areas of any organization.
Classically, CI methodologies are implemented without being properly integrated
with MSs. This is one of the main reasons why lots of implementation efforts of CI
methodologies fail. Thus, the need and benefits for formulating and modeling such
an integration of QM and CI methodologies with a proposed comprehensive MS are
discussed in this chapter.

Keywords Lean Six Sigma (LSS) Management System (MS)
Integrated Company-Wide Management System (ICWMS) Continuous

Improvement (CI) Quality Management (QM) Total Quality Management

(TQM) Alignment Integration
7.1 Introduction
The effective execution of CI methodologies is an important success factor for any

organization. As competition gets tougher, the rate of improvement and opti-
mization of processes determines the survival of any organization. Among various
QM and CI methodologies, Lean and Six Sigma stand out as excellent method-
ologies that are widely used by various industries. The integration of the two into
LSS has created a strong methodology which is well known and accepted (Bhuiyan
and Baghel 2005; Bendell 2006; Snee and Hoerl 2007).
However, even with the best methodologies in place, numerous studies pointed
out that most of the industries have failed in their CI efforts (e.g., Devane 2004;

https://doi.org/10.1007/978-3-319-99034-7_7
116 7 The Integration of QM and CI Methodologies with MSs
Bhasin and Burcher 2006). Organizational misalignment and ad-hoc approach are
two of the reasons why deployment has failed as they lead to scattered projects
across the organization (Martin 2007). Many industrial organizations today are not
realizing the full potential of what QM and CI methodologies, integrated together,
along with a proper comprehensive MS can achieve for them. There are several
cases of failure in implementing CI projects and maintaining their benefits which
typically result in the tremendous waste of energy, resources and in some cases, the
closure of industrial facilities which are unable to cope with the increasing pressure
of competition. Organizational success is largely dependent on the proper total
integration of various MSs and CI methodologies. This will achieve the goals of
aligned and optimal CI leading to optimal quality, productivity, efficiency, etc.,
which are expected to make a significant contribution to all stakeholders including
owners, workers, customers, and the society in general. Only a few researchers have
started looking into this topic and they are still scratching the surface. The topic
presented here paves the way toward this proposed integration.
Different researchers have indicated that there is a need for a comprehensive MS
that will serve as a foundation to ensure proper alignment and optimization of all
resources in an industry (e.g., Chapman and Hyland 1997; Kaye and Anderson
1999; Dahlgaard and Dahlgaard-Park 2006). An integrated understanding of
management including new forms of management was anticipated as the future
trend for TQM (Gundogan et al. 1996). This chapter also aims at introducing the
need for and the benefit of a MS, which is proposed in Chap. 8, practically validated
in Appendix D at real industries and is called the Integrated Company-Wide
Management System (ICWMS) . This comprehensive and novel MS integrates QM
and CI methodologies with MSs and focuses on providing benefits, such as cus-
tomer satisfaction and economic production, for all stakeholders. Next, a discussion
of what gap the integration is attempting to bridge and how critical it is to any
organization.
7.2 Gap to Be Bridged by This Integration
Over several decades, quality has evolved through the following stages: inspection,
QC, quality assurance, QM, and CI (Kaye and Anderson 1999). This discussed
topic builds up on this evolution to further enhance QM and CI. To stay compet-
itive, a business has to always be improving faster than other businesses, and for
this improvement to happen effectively, there needs to be a strong foundation. If the
execution is not right, the results will not be as satisfying as anticipated. The key to
success lies in the proper execution of QM and CI methodologies through their
proper integration into MSs, so that this becomes the new business culture. In 1999,
a Fortune magazine article reported that the primary reason for most of the CEOs’
failures, estimated at 70%, was poor execution, not bad strategy (Charan and Colvin
1999). Another research indicated that only 10% or less of companies succeeded in
implementing Lean tools (Bhasin and Burcher 2006). Currently, there is a crisis in
7.2 Gap to Be Bridged by This Integration 117
organizational CI programs, particularly in their execution and sustainability

(Devane 2004). There are many examples of Six Sigma and Lean Projects where
after being done, the control or follow-up plan is no longer adhered to and the
realized savings and improvements return to the way they were prior to the project.
LSS itself can be thought of as a QMS; however, there is a need for a holistic and
comprehensive MS that envelops quality as a key component intercepting with its
various aspects. LSS can be considered as a MS; however, according to McAdam
and Evans (2004), problems can still arise if other MSs are not implemented
simultaneously. Pyzdek (2004) indicated that there is often a disconnection between
organizational goals and the strategies to achieve them; improvement initiatives
tend to be random, local, and unfocused. Soltani and Lai (2007) noted that there is a
major discrepancy between the expressions of QSs (such as TQM and ISO 9000)
and their actual practices. A lot has been written about the necessity for QM and CI;
however, none has provided a solid foundation for sustainable success (Johnson
2004).
Snee (2007) suggested that there is a need for a holistic approach for business
improvement which is more than just CI methodologies; it should also incorporate
MSs, functions and cultures and integrate the benefits of ISO, MBNQA, Six Sigma
and Lean. For any organization, the integration of CI methodologies and QMSs to
achieve TQ is necessary; a good exploitation of potential improvements and
resources is among the prerequisites for this integration (Pfeifer et al. 2004). TQ
requires an infrastructure of basic MSs, such as CRM, leadership and strategic
planning, HRM, process management including daily control and information
management (Evans and Lindsay 2002). Within strategic alignment, QM is defined
as the integration of all business activities involving all participants through CI
which is built on a culture of trust, cooperative learning, and knowledge sharing to
enhance the performance (Mellat-Parasat and Digman 2007).
Monden (1983) suggested that functional MSs, which promote CWQC and
mainly include quality assurance and cost management, are important as they
enhance communication across the departments and speedup implementations. To
achieve BE, many companies have implemented different programs such as Six
Sigma and BPR which incorporated elements of management but were not always
considered as QSs. These programs were run separate from QSs, such as ISO 9000
(Mangelsdorf 1999). Mangelsdorf (1999) indicated that the total integration of all
aspects of management (including QMSs such as ISO 9000) into an integrative
business MS has a significant impact on quality managers in industrial organiza-
tions. According to Snee (2004), Taylor (1911) suggested that the best way of
improving productivity is to run two separate entities: one looking after producing
and one looking after planning and improving. This eventually evolved into what
companies use today in the form of the labor and management model.
The traditional way of running a business is to have two separate entities: one is
managing the business and the other is improving the business. However, there is a
great advantage in integrating these two entities with each other. Currently, many
companies are still separating the two and this integration is just at the beginning
stages. Organizations running without a proper implementation of a robust MS are
showing symptoms such as a lot of actions and initiatives fall behind due to failure
in focusing on both processes and people, decisions are often taken based on
feelings, not on data or facts, and there is regularly a lot of confusion, frustration,
and management by excuse due to the lack of alignment.
In the 18-organization study of Kaye and Anderson (1999), some displayed
weaknesses such as CI activities were insufficiently integrated, time was wasted on
blaming people instead of dealing with problems, a low level of empowerment
existed and people seemed to always be in a crisis (trying to resolve problems and
their symptoms by quick fixes without paying proper attention to root causes).
Here are some requirements and foundations needed for successful deploy-
ment of CI (including some ‘culture change management’-related requirements)
which are related to developing the proposed system in Chap. 8, as found in the
literature: human integration and employee involvement including effective review
and two-way communication (meetings, Internet sessions, email, surveys, audits,
newsletters, competitions, board messages, etc.), teamwork (cross-functional across
boundaries) and team selection (Kaye and Anderson 1999; Hines et al. 2004;
Anderson et al. 2006; Antony 2006), strategic framework or perspective aligning
projects to corporate business objectives (Chapman and Hyland 1997; Kaye and
Anderson 1999; Hines et al. 2004; Terziovski 2006; Antony 2006; Martin 2007), a
broad framework to link SC improvements to strategic initiatives (Amer et al.
2007), strong leadership involvement and commitment (Chapman and Hyland
1997; Kaye and Anderson 1999; Anderson et al. 2006; Antony 2006; Crump 2008),
a stable and enabling organizational infrastructure before even starting an
improvement program that is usually dynamic (Chapman and Hyland 1997;
Anderson et al. 2006), a supportive organizational culture of innovation, lesson
sharing, and empowerment (Chapman and Hyland 1997; Kaye and Anderson 1999;
Antony 2004; Anderson et al. 2006; Antony 2006; Bhasin and Burcher 2006;
Dahlgaard and Dahlgaard-Park 2006), a process management approach including
documentation and standardization (Chapman and Hyland 1997; Kaye and
Anderson 1999; Kwak and Anbari 2004), an improvement model and supportive
toolkit (Chapman and Hyland 1997; Anderson et al. 2006), a daily management
approach (Kaye and Anderson 1999), a performance management approach that
includes reporting (Kaye and Anderson 1999; Kwak and Anbari 2004), training,
incentives and project management approach (Basu 2004; McAdam and Evans
2004), a link to customers, suppliers and human resources (Kwak and Anbari
2004), availability of resources (a benchmark for human resources required for CI is
2.5% of full time equivalents) (Basu 2004), trust and cooperative learning
(Mellat-Parasat and Digman 2007) and an initiative management approach linking
projects to customers and financial impact for accountability, including proper
project selection and prioritization (Antony 2004, 2006), technology exploitation
(George 2002), a supporting structure of improved MSs, an effective change pro-
gram (Martin 2007), barriers removal between individuals and departments and the
unity of purpose (Terziovski 2006), leadership commitment, behavior and aware-
ness, communication and culture, reward and recognition, effective training and
7.2 Gap to Be Bridged by This Integration 119
competency (Hilton and Sohal 2012; Jayaraman et al. 2012; Jeyaraman and
Teo 2010).
Even organizations that use self-assessment auditing against BE and QM
models, such as MBNQA and EFQM, are failing to sustain improvement especially
between the audits (Kaye and Anderson 1999). The competitive CI model, pre-
sented by Dyason and Kaye (1995), has been developed to overcome these
weaknesses but still, as suggested by Kaye and Anderson (1999), lacked other key
critical success factors. They later incorporated those critical factors in a new CI
model developed in 1999, which was revised again to stress the management role.
They proposed an adjusted model, as preparatory and complementary for the more
complex models, such as MBNQA, which still needed to be refined and expanded
in the future as they suggested. Further, here are more discussions of examples
found in the literature of models describing attempts to integrate improvement
methodologies and MSs to succeed in CI implementation.
Integrating Six Sigma processes into organizations still has room for improve-
ment. Six Sigma is seen as a part of a MS to achieve BE. It helps in the management
of processes and still needs to be integrated with other management practices
(Kwak and Anbari 2004). Six Sigma is not a MS (although some researchers
consider it as one) since it needs to be integrated with other more comprehensive
quality standards, such as MBNQA or EFQM (Raisinghani et al. 2005). Hoerl
(2004) indicated that a key challenge for Six Sigma as an improvement method-
ology is to integrate it into normal operations so that it becomes part of an orga-
nizational QI system, where its integration with Lean [which can be considered as a
management concept (Kollberg et al. 2007)], will be part of an improvement system
or a QMS that is bigger than the two. There had been proposals to integrate QMSs
such as Six Sigma and Lean together as in the proposed house of competitiveness
(Kovach et al. 2005). Another example of the integration of Six Sigma and QMSs is
given in (Pfeifer et al. 2004). Also, Juran Institute also presented the Juran MS,
which is a model describing how Lean and Six Sigma are linked to other MSs
(Juran Institute 2007).
Another example of an integrated MS that included quality, environment, health
and safety MSs was proposed by Wilkinson and Dale (2001). They suggested that
their model addressed issues of scope and culture and contributed to the fulfillment
of TQM models such as the EFQM. In the Total Improvement Model proposed by
Harrington (1995), it was recommended for the organization structure to become
flatter, process-driven, and decentralized, where bureaucracy is removed from
processes and people are empowered, while being accountable. The model included
quality, resources, technology, productivity, and cost management.
Another model proposed by Mandal et al. (1998) was called a Total Quality
System and consisted of management (planning process of controlling and orga-
nizing) and technical (conformance and design processes) systems. Kakuro (2004)
proposed a model called Science TQM, which consisted of total job QMS, total
development system, total production system, total marketing system, and total
intelligent MS. Florida Power and Light used a QI triangle model that included QI
programs, teams, daily work, and policy deployment (Walton 1990). Castle (1996)
proposed an Integrated Quality System that was defined as a MS which uses

intelligent activities and development of policies to integrate human activities to
achieve CI. Daft and Macintosh (1984) proposed a Formal Management Control
System that was used to transfer the strategy to lower levels of the organization and
included budget, performance appraisal, statistical reports, policies, and procedures.
Castle (1996) indicated that Feigenbaum proposed a TQC System which achieves
customer satisfaction through integrating the efforts of all in the organization.
As seen from the literature, there have been different attempts that considered the
integration of QM and CI methodologies with MSs, which dealt with the integration
of one or more of Six Sigma, LSS, TQM, MBNQA, health MSs, etc. In sum, here
are some important considerations for the integrated model (ICWMS proposed in
Chap. 8 and practically validated in Appendix D takes into account a lot of these
considerations):
• It needs a strategic MS aligning people and projects to corporate business
objectives, such as customer satisfaction, cost reduction, and financial savings.
• It needs to focus on employee involvement, teamwork, unity of purpose, effective
communication, technology exploitation, and strong leadership commitment.
• It needs to establish a strong excellence infrastructure and a supportive orga-
nizational culture of innovation, flexibility to change, lesson sharing, trust,
cooperative learning without barriers, and empowerment with accountability.
• It needs a process MS that comprehensively incorporates QM and CI method-
ologies, such as ISO 9001, safety MSs, LSS, TQM, quality award models, with
focus on best practice documentation and process standardization.
• It needs a daily operation MS and a performance MS that includes reporting,
training, incentives, and HRM.
• It needs a project MS to properly deploy the prioritized strategic initiatives using
the right teams and the available resources.
• It needs to be comprehensive in scope with links to and benefits for all stake-
holders including customers, suppliers, and employees.
7.3 Benefits of This Integration
Some great advantages of integrating QM and CI methodologies with MSs are

overcoming the resistance to implement a change, increasing the commitment to CI,
and compensating for the weaknesses of the individual methodology, as these
methodologies complete each other. Six Sigma itself is a powerful management
strategy (Antony 2006); however, to increase its effectiveness, savings, gains
holding and speed of application to more projects, a holistic MS is needed.
Lean and Six Sigma lack a formal link to policy deployment (Bendell 2006) and
strategic goals to achieve CI (Kaye and Anderson 1999). LSS needs an integrated
project MS to be successful (Snee and Hoerl 2007). The policy deployment link,
strategic goals, and project MS need to be key components of the proposed MS.
7.3 Benefits of This Integration 121
Also, the holistic MS strengthens the people and system approach to improvement.
Generally, QMSs will possibly suffer from some of the following disadvantages:
high documentation and administration efforts, high implementation and running
costs, and being a fixed system (Pfeifer et al. 2004). However, it is recommended in
the proposed integrated system to keep the documentation (which needs to be a key
part of the proposed MS) as simple as properly possible and to build it over time,
starting with the most critical processes to the business. This is a key contributor to
success, as in the example of a highly structured company, where experience and
improvements are always built upon historical improvements and there are less dips
in the performance line (i.e., fewer losses in performance) caused by new people
learning from scratch instead of building on previous experiences (Fig. 7.1).
Some of the advantages for the integration of CI methodologies and QMSs are
effective identification of improvement areas, conformance of project objectives
with process objectives, sustainability of improvements, choice of proper project
participants, meeting organizational requirements due to using standard procedures
and measures, and increased knowledge through the documented experience
(Pfeifer et al. 2004). Individual CI methodologies have limitations they are criti-
cized for. Even LSS cannot be fully successful without being integrated with a
comprehensive MS. The integration of QM and CI methodologies with a holistic
MS ensures that proper alignment and timely information are in place. It optimizes
the overall performance of the organization and enhances the rates of improvement.
Here is a summary of some of its benefits and why it is recommended:
• It increases the rate of improvement by faster implementation of more projects
and better selection of the proper projects of highest impact.
• It optimizes the different resources of the organization (saving time and efforts).
• It promotes innovation, adaptation to external events, flexibility and acceptance
of change and improvement.
• It improves accountability, control, and holding of gains.
• It overcomes the resistance to implement a change.
• It increases the motivation, commitment, and involvement of all people in CI
activities which are linked to all stakeholders.
• It reduces environmental, safety, and other risks.
• It compensates for the weaknesses of the individual methodology or system.
Fig. 7.1 Examples of a % Improvement Company 1

company that uses a
structured MS (Company 1)
and another that does not
(Company 2)
Company 2
Time
• It increases the financial savings and the effectiveness of CI methodologies.

• It ensures that proper focus, strategic alignment of people and operation and
timely information are in place. It provides a broad framework to link SC
improvements to strategic initiatives.
• It optimizes the overall performance of the organization and enhances rates of
CI.
• It transforms the culture of the organization into a culture of cooperation, trust,
excellence, and innovation.
• It reduces duplication of efforts and defines everyone’s roles and responsibilities.
• It ensures an effective communication and infrastructure for all activities.
QM and CI methodologies are related to various MSs and share common grounds
in terms of customer satisfaction. They also complete each other and can be inte-
grated together, to form a strong approach. This chapter extended previous works1
regarding these topics, included new ideas and incorporated them in a new system
and introduced the significance of this integration (of CI and QM with MSs). It
presented the gap it is attempting to bridge along with some important considera-
tions as well as requirements for successful deployment of CI methodologies.
Furthermore, several examples found in the literature for models, which describe
attempts to integrate improvement methodologies and MSs, were presented. In
addition, the benefits for the development of a comprehensive MS were
summarized.
In order for businesses to excel and implement CI methodologies effectively, the
integration of QM and CI into a comprehensive MS is strongly recommended. This
integration represents an evolution that will provide a solid foundation for all
activities of a business, to ensure that proper alignment exists resulting in the
optimization of the resources and the enhancement of the performance of the
organization. The use of a well-structured system that engages the entire organi-
zation into CI is essential to survive and stay competitive. The topics discussed in
this chapter are an introductory step in that direction. Chiarini (2013a, b) and
Chiarini and Cherrafi (2017) cited this integration as part of their studies on Six
Sigma, the relationship between TQM and Six Sigma, and other case studies. Also,
Marques et al. (2013) cited this integration as part of a study on Six Sigma and
ISO9001. Bevilacqua et al. (2011) cited this integration as part of their study on
ISO/Technical specification (TS) 16949:2009. In addition, Smith (2011) cited this
1
This chapter is mainly prepared based on our published work: Salah, S., Carretero, J. A., and
Rahim, A. (2010) The integration of quality management and continuous improvement method-
ologies with management systems. Int. J. Productivity and Quality Management, Vol. 6, No. 3,
pp. 269–288.
work as part of a study on strategy implementation and best practices. Finally,

Erceg et al. (2018) cited this work as part of their study on CI methodologies.
Next, Chap. 8 proposes a new comprehensive MS called ICWMS. It presents an
idea of what this system looks like its structure, its tools, and components and how
they interact with each other. Also, Chap. 8 provides a detailed description of how
this ICWMS can be implemented in practice. Chap. 9 provides a discussion on the
comparison of ICWMS with other MS and QS models. Finally, Appendix D
describes the implementation phase of ICWMS through two practical case studies
which are carried out using real industries to verify the model quantitatively and
qualitatively.
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Chapter 8
Integrated Company-Wide Management
System (ICWMS)
Abstract Traditionally, various MSs are implemented without being properly

integrated together leading to waste of resources. Recently, MSs have gained
attention as they form a critical infrastructure for improving and controlling the
operation systems. However, there is a gap in the form of a need, as indicated in the
literature, for a comprehensive system that integrates them together. This integra-
tion constitutes the goal of the proposed system, which is ensuring the existence of
an infrastructure for Continuous Improvement (CI) and the strategic alignment of
all areas of a business and the people toward the objectives of Business Excellence.
The proposed system is called the Integrated Company-Wide Management System
(ICWMS) . ICWMS’s five main components are strategic, project, operation,
process, and performance MSs.

Keywords Management System (MS) Integrated Company-Wide

Management System (ICWMS) Company-Wide Quality Control (CWQC)

Total Quality Management (TQM) Lean Six Sigma (LSS) Continuous

Improvement (CI) Quality Management System (QMS)
8.1 Introduction
As indicated in the previous chapter, there is a need for a comprehensive system

which integrates the different operation systems of an organization together. The
integration of the different management components together ensures the existence
of an infrastructure for CI and the strategic alignment of all of the business portions
and the people toward BE. A comprehensive MS needs to account for the various
requirements of an organization, such as effective communication, financial
accountability, a good supporting structure, process focus, standardization, audit,
control application, environmental compliance, information technology, sales,
marketing, and SCM.
The proposed system is called ICWMS and it mainly draws on five MSs, which
are grouped into strategic quality management, quality project management, daily

https://doi.org/10.1007/978-3-319-99034-7_8
128 8 Integrated Company-Wide Management System (ICWMS)
(operation) quality management, process management (which incorporates QM and

CI methodologies), and quality performance management. These MS components
can be further detailed where they include various management and quality sub-
systems found across various organizations, such as financial, customer relations,
culture, resources, communication, information, CI, documentation. In addition to
what is already known in the literature regarding these five components, more
discussion is provided. This chapter provides a comprehensive and precise study of
these components to add a new understanding to MSs. A road map is provided for
each of them as well as a framework for the whole system and an auditing approach
to clarify how ICWMS can be developed. This chapter describes ICWMS, its
structure, main tools, components, and their relationships. ICWMS is validated
through actual case studies in Appendix D.
8.2 Proposed ICWMS
In the ICWMS environment proposed in this chapter, a strong integration of

business management and business improvement can be achieved where every
employee becomes aligned with the CI objectives of the organization. Employees
consider how to improve the process as they work inside that process. ICWMS
provides a solid structure and a foundation for all activities of a business, i.e., the
core value chain and the value-enabling activities, to ensure their proper alignment
resulting in the optimization of resources and enhancement of performance. The use
of such a well-structured system that engages the organization into CI is essential to
survive and stay competitive.
ICWMS promotes effective asking and listening. It focuses on achieving con-
sensus among everyone in the team regarding the decision made. Everyone is
guaranteed the right to express agreement or disagreement. This fosters the right
attitude and boosts the morale for success in any change initiative and establishes a
sense of ownership. A key goal for this system is to achieve alignment across the
whole business where every individual is accountable, through their actions, for
what the customer and the business require. Also, ICWMS promotes participative
management, which involves and empowers employees, and builds a total
company-wide quality culture of cooperation.
ICWMS can be considered as an organization governance system that is able to
align and integrate different MSs to achieve control in an ‘entrepreneurial and
ethical way’ (Hilb 2006), in order to satisfy the organization’s desired targets.
The proposed system’s name (ICWMS) was partially derived from CWQC to
indicate that ICWMS promotes CWQC and ensures optimum quality from the
perspective of the whole society as shown in Fig. 8.1 (Sects. 2.10 and 2.5).
There are differences in understanding the term integration as merging of doc-
umentation to reduce auditing and administration costs, or implementing an inte-
grated system through a TQ approach (Wilkinson and Dale 2001). ICWMS is an
8.2 Proposed ICWMS 129
Fig. 8.1 Basic economic quality level model as adapted from (Foster 2007)
integrated system implemented through a total company-wide quality approach.

It also incorporates integrated documentation through its process management
component.
8.3 Components of ICWMS
In the literature, different components of management are found under different

names. These components have not necessarily been used together. The proposed
ICWMS encompasses different aspects of the management disciplines. It mainly
draws on five MSs which are subdisciplines of management and the tools used,
within these components, are generally acknowledged. However, the grouping and
connection of these five components with each other represent the novelty of
ICWMS. It is because of these groupings and connections that ICWMS provides a
solid infrastructure for managing and improving processes. In what follows, a short
description of each of the components is provided, followed later by an illustration
of how they fit within ICWMS.
8.3.1 Strategic Quality Management
Strategic quality management is a process for developing achievable strategic plans

and implementing them, at all levels, to ensure the proper alignment of the
industrial organization as a whole. Alignment includes creating a structure for CI
and its supporting systems. It is a way to form a framework for involving people in
the creation of a strategy, transforming it into prioritized initiatives, monitoring
progress, and rewarding by results (Kaplan and Norton 2004). Strategic quality
management is supported by the QM understanding so that the resulting
improvement initiatives are strategically aligned.
The main goal of strategic quality management is to internally and externally

assess the Strengths, Weaknesses, Opportunities, and Threats (SWOTs) facing an
organization, in order to be in a better position than competitors, by identifying the
best approaches (Friday-Stroud and Sutterfield 2007). To assess the strength of the
competitive position of an organization, Porter (1979) proposed a model which
included five forces: rivalry between suppliers, threat of new market entrants, power
of buyers, power of suppliers, and threat of substitute products. Political, Economic,
Social, and Technological (PEST) analysis can help in strategic planning prior to
SWOT analysis as it measures the organizations market and potential according to
PEST aspects (Business Balls 2006).
There are three levels of strategic planning according to Friday-Stroud and
Sutterfield (2007): corporate, business, and functional plans of actions which aim at
ensuring all people work toward the same direction. Harrington (1995) presented
that strategic business planning means that all employees should understand why
the industrial enterprise exists, where it is heading and they should have an agreed
upon plan on how to get there. Benchmarking is another great tool that can be used
in ICWMS to assess where a company stands today in comparison to other
world-class competitors, which helps in establishing a good answer for the three
questions mentioned above. Determining the vision, mission, objectives, and
associated success factors is a collective effort done by management with the
participation of staff through open communication and is seen as a best practice
(Kaye and Anderson 1999).
The type of planning often mentioned within TQM is called management by
objective, which is driven from the leadership of the organization and follows the
structure of the organization until reaching all employees in the form of QI goals,
however, without means or plans to achieve these goals. Also, often these goals are
cross-functional and do not necessarily follow the organizational structure, which
makes them very difficult to accomplish. A more mature level of planning, which is
promoted by ICWMS, is participative strategic quality management, where man-
agement by objective is successful, by adding a bottom-up approach to convey the
actions or method of achievement. So, the focus is on the ‘how’ and not only on the
‘who’. This can shift people from being demoralized to being encouraged to
express, through transparent system thinking, their concerns and ideas. These are
then rationalized using tools, such as an interrelationship diagram. Also, barriers
between departments are removed to make cross-functional teams work easier.
In ICWMS, strategic quality management takes a participative approach, which
starts with determining the vision, mission, and strategic goals for a company.
These long-term goals are linked to the balanced score card (BSC) and the corre-
sponding short-term objectives are developed, as well as the initiatives and mea-
sures associated with these objectives. A key tool that can be used here to link
strategic goals with initiatives is the Hoshin X-Matrix (Gels 2005) where break-
through objectives over three to five years are listed and linked to another list of
next year’s objectives, which in their turn are linked to a list of improvement
initiatives or projects that are connected with a group of metrics.
8.3 Components of ICWMS 131
Hoshin planning (Hoshin-Kanri or policy deployment) is a tool used to enable

executive teams to make decisions and focus resources on the critical initiatives
necessary to achieve the objectives of the organization. It aligns resources and
establishes clear targets against which progress is evaluated on a regular basis
(Search Engine Marketing Operational Excellence 2007) or even on a daily basis.
Table 8.1 presents a partially filled template for a policy deployment matrix which
illustrates how the initiatives are translated through the different levels or tiers of the
organization. This points out how strategic MS interacts with performance and
operations MSs. After that, the problems and obstacles that prevent the organization
from achieving its strategic quality objectives are brainstormed and the key strategic
initiatives are determined as a result. These initiatives are then assigned to cham-
pions and scheduled so as to be detailed and managed as part of the second ICWMS
component (quality project management).
The BSC is based on strategies that translate the leadership vision into opera-
tional metrics. It provides KPIs in four areas: customer, financial, internal pro-
cesses, and learning and growth. It is balanced such that improving cycle times and
cost is not at the expense of quality (Pyzdek 2004). It considers monetary and
non-monetary objectives in a balanced way where objectives can be linked with
each other using cause and effect matrices (Pfeifer et al. 2004). Integrating orga-
nizational improvement activities into strategic goals is a foundation to achieve CI
A modern version of the BSC, which is also a quality performance management
tool, can be used to enhance the application of QM tools, such as ISO, LSS, TQM,
and BE models. This is done through a better holistic strategic quality approach, a
process to translate strategy into lower-level goals, an evaluation of the impact of
QM initiatives on strategic priorities, and a two-way communication (Anderson
et al. 2004). Organizations using BSC MS which achieved strategic focus and
alignment shared five principles: the translation of the strategy to operational terms,
organization alignment to the strategy, making the strategy everyone’s job through
communication, making it a continuous process by managing and learning, and
mobilizing change through executive leadership (Kaplan and Norton 2001).
Tables D.1 and D.3 give examples of the use of BSC metrics.
Additional strategic quality management tools include QFD, which is used to
identify enabling strategies based on customer outcomes, employee and customer
surveys as well as financial and operational reports (Killen et al. 2005). Other tools
are the strategy maps which are used to transform the strategy into operations
(Kaplan and Norton 2004). Another tool is the sales and operations business
planning, which is a review that typically take place monthly (or even weekly) at
management level to align objectives with operational tasks (Basu 2004). Also,
budgets are developed as part of strategic planning. Figure 8.2 explains the flow of
the strategic quality management component.
Table 8.1 A partially filled template for a policy deployment matrix as adapted from (Wallace
and Bennett 1994)
Tier I: General manager matrix:

X Implement JIT X X
50% of output
Measurement
JIT is controlled
Lean Six Sigma
Operations
Implement
standard hour
Cost per
Who
manager
X Beat inflation X
Tier II: Operations manager matrix:
Implement single-
X X X
minute-exchange-of-dies
Fabrication Manager
Implement JIT
Reduce set-up
% of standard
Measurement
Sheet Metal
hours shipped
time by 75%
Who
50% of output JIT is

X X
controlled
Tier III: Sheet Metal Fabrication Manager matrix:
Coordinate
implementation of set-up
X X X
reduction for the selected
work centres
up reduction plan
Measurement
exchange-of-dies
Meet the set-
Sheet Metal
reduction chart
single-minute-
Implement
by December
Supervisor 1
Fabrication
Set-up
Who
Reduce set-up time by

X X
75%
Strategic management draws on both quantitative and behavioral sciences

(Friday-Stroud and Sutterfield 2007). Values form an essential part of the corporate
strategy as they are the basis for its culture. Leaders need to integrate their values of
integrity, trust, respect, teamwork, and commitment to quality into the organiza-
tion’s MSs in order for value to occur (Evans and Lindsay 2002). Trust and
Fig. 8.2 Strategic quality management
cooperative learning were identified as two keys for successful alignment

(Mellat-Parasat and Digman 2007). Within ICWMS, strategic quality management
promotes asking questions instead of telling, engaging people instead of com-
manding and making decisions based on data. ICWMS is proximate to the strategic
architecture school listed by Moreno-Luzon and Peris (1998), which is a mix of
flexible learning and standardized planning strategies.
8.3.2 Quality Project Management
Also referred to as initiative management or cross-functional management, quality

project management is about managing the execution or deployment of the strategy.
It depends on clear accountability (Kaplan and Norton 2006). In ICWMS, the first
steps in quality project management are to properly select a QI project and a team,
to fill a project charter and to define the outcome of the project on hand. Then, the
team brainstorms the main activities and milestones, groups them, and creates a
Gantt chart. The remaining task is to monitor the progress against plan and com-
municate any variations to the team. This intersects with daily quality management.
Beside the act of managing a project or an initiative, it is highly important to
empower team members and include them in the process of planning, as explained
above, while brainstorming. This ensures a sense of commitment is established.
Teamwork is essential to the success of initiatives where a high-performing team

can save a lot of time and cost by establishing good cooperation, communication,
and morale. Teams need to be trained, equipped with the right methods and tools,
and mentored through the initiative MS in order to ensure the success of the
industrial enterprise. To succeed in the implementation of strategic initiatives, there
should not be a focus on too many initiatives or excessive planning and paperwork
(De Feo and Janssen 2002). There is a limit to the ability of people to deliver the
targeted results, and thus, the right resources need to be allocated to each project for
it to succeed.
The evaluation of strategic quality initiatives includes continuous reviews of
progress against plan using feedback systems (Friday-Stroud and Sutterfield 2007).
Setting up clear performance targets that are understood and measurable is
important in order to achieve them as the goal theory states. Challenging goals may
cause lower performance unless people are well-trained and use proper tools
(Linderman et al. 2006).
Another key part of quality project management is the discipline of knowledge
management which is concerned with developing a strategy for capturing, using,
and transferring knowledge across an organization to achieve CI. The learning
process occurs through the following steps: data forms patterns, information is
developed, knowledge is generated, and learning happens where the organization
culture is transformed (Barber et al. 2006). The management of timely information
flow across an organization includes the creation of a culture of internal and
external information sharing, which is essential for the implementation of initiatives
(Zeng et al. 2007). It is important to ensure that individuals understand the initia-
tives and how their daily roles are impacting them. This intersects with daily quality
management. Figure 8.3 explains the flow of quality project management. Project
selection and culture change management are discussed next.
8.3.2.1 A Selection Approach for CI Projects
The project selection and prioritization are components of quality project man-
agement. Project prioritization and selection is a key ingredient for the successful
implementation of Six Sigma. However, selecting the proper project and the pri-
oritization of projects is a limitation facing TQM and Six Sigma as there are few
tools available and the process is subjective (Banuelas and Antony 2002; Antony
2004; Bhuiyan and Baghel 2005; Antony 2008). It is essential to have a system
perspective in selecting and executing projects in the context of all the goals of an
organization (Goh and Xie 2004). Su and Chou (2008) indicated that it is chal-
lenging to generate and prioritize critical improvement projects and there is no
standard unanimous rule as it is still based on pure subjective judgment in many
organizations. In addition, some projects are complicated, risky, related to different
departments and difficult to quantify. Snee and Rodebaugh (2002) listed four stages
for the project selection process which are project identification, project accumu-
lator creation, project examination, and improvement system creation.
Fig. 8.3 Quality project management
Generally, improvement projects are done due to different reasons such as

• to free-up capacity due to the necessity of future expansion.
• to solve a chronic customer satisfaction issue or eliminate a risk and generate
external benefits.
• to drive costs down and productivity up or increase cash flow.
In the literature, there are several considerable factors mentioned in relation to
the projects selection, prioritization, and selection of quality tools (Pande et al.
2000; Banuelas and Antony 2002; George 2002; Snee and Rodebaugh 2002;
Antony 2004; Snee 2004; Banuelas et al. 2005; Gels 2005; Ricondo and Viles
2005; Sirkin et al. 2005; Antony 2006; Herron and Braiden 2006; Mader 2007;
Martin 2007; Schroeder et al. 2008). Also, there are different approaches used in
industry to classify CI projects after selection and prioritization (Crawford 2004;
Hoerl 2004; Kiemele 2005; Snee 2005; Bevan et al. 2006; Snee and Hoerl 2007;
Su and Chou 2008).
In order to succeed in CI initiatives, the selected projects need to be of
manageable size, doable and of a great impact on the business. Also, they have to
be measurable; otherwise, they cannot be controlled.
Snee and Hoerl (2007) indicated that gaps in business and performance play a
key role in the selection process. Also, risks and benefits can be considered as the
main factors to use in project selection and prioritization (Su and Chou 2008). The
desirability of a project depends on a benefit versus effort analysis (George 2002).
Categories of project financial benefits include direct cost savings, incremental
margin, lower carrying cost or working capital, cost avoidance, and other time
metric improvements that may be considered as soft savings (Martin 2007). Antony
and Banuelas (2002) presented that three categories of project selection criteria are
business benefits (customer impact, financial impact and impact on core compe-
tencies), feasibility (required resources, complexity of project and expertise avail-
able), and organizational impact (cross-functional benefits and knowledge benefits).
Some companies use a matrix for project prioritization including factors like
safety, legality, strategic link, risk, measurability, time frame for results, estimated
dollar benefits, capital required and leveragability. Other companies base it on key
performance indicators and balanced score card (BSC) -related factors such as the
impact on operation, the impact on financials, the impact on operators, and the
impact on customers with the corresponding weighted factors. In a study of 225
companies, it was found that there is a correlation between project success and four
hard factors which can be used to prioritize the selection of winning change pro-
jects. These factors were project time line, capabilities integrity, people commit-
ment, and additional effort resulting from change (Sirkin et al. 2005). Other
important factors in selecting projects are duration risk, probability for success
(Antony 2006), and the availability of data. A comparison between current baseline
performance and key customer output variables can help prioritize project selection.
Budget gaps, cost avoidance, benchmarking, regulatory issue, health and safety
issue, and process assessment results are all among factors leading to choosing
improvement projects (Martin 2007). Sometimes, projects can be selected based on
previous experience of similar opportunities that can be leveraged.
An operational assessment including leadership interviews can help select the
right project as it identifies business gaps and potential benefits (Martin 2007).
Projects may be selected by top management or by people on the floor based on
defects per million opportunities (DPMO) , cost savings, Cost-Of-Poor-Quality
(COPQ) , capacity, cycle time, customer satisfaction, and internal performance
(Banuelas and Antony 2002). Projects can be selected by top-down or bottom-up
approaches but each has its own pros and cons. Top-down approach is linked to the
strategy, but requires a cross-functional team to do diagnosis, whereas bottom-up
approach allows more people to generate a wider range of ideas, but is not typically
supported by data and it surfaces projects based on personally experienced defects
that may not be critical to business. Companies may apply both to have an inclusive
project selection system where ideas are sorted and screened by trading off project
benefits such as financial benefits, customer satisfaction, potential to leverage across
the business and strategic fit, with efforts required to complete the project such as
resources, risks, capital (George 2002). Also, self-assessment audits based on
quality awards [such as Malcolm Baldrige National Quality Award (MBNQA) and
European Foundation for Quality Model (EFQM) which is also called Business
Excellence Model (BEM) ] helped identify areas for improvement (Ricondo and
Viles 2005).
Here are some of the tools used in project selection and prioritization that are
found in the literature. Su and Chou (2008) proposed using an analytic hierarchy
process to evaluate the projects benefits and a Failure Mode and Effect Analysis
(FMEA) to evaluate the risks of the projects and finally mapping the risks versus
benefits to classify the category of each project. Banuelas et al. (2005) used a cause
and effect matrix to list the potential projects affecting the weighted process outputs
or factors to guide them through the selection and prioritization of projects. Pande
et al. (2000) pointed out that choosing five to eight factors that are most relevant to
the organization needs would be sufficient and better than using many factors in
project selection. Also, Snee (2004) presented that a project accumulator can be
used to organize the project selection after prioritization is already done. Some
organizations implementing Lean use a VSM product family matrix as a tool to help
in the selection and prioritization of projects.
Projects can be selected based on the Voice-Of-the-Customer (VOC) and the
business strategy (Su and Chou, 2008). Antony (2004) indicated that the
Critical-To-Quality (CTQ) considerations change as customer demands are dynamic.
So, it is recommended in this work to conduct a review of the CTQ considerations as
part of the control plan audit done at the end of the project which may trigger a new
opportunity or project. With regards to the strategy, it is important to ensure the
alignment of the selected projects to the goals of the organization. Thus, the project
selection process is a key part of strategic management.
According to Schroeder et al. (2008), Six Sigma project selection rights reside
with management to ensure financial and strategic implications are considered.
Mader (2007) indicated that the identification and selection of LSS projects require
understanding the strategic plan to align improvement with it, understanding the
policy deployment system, understanding the core business process performance,
and performing a risk/return/goal analysis. A key tool that can be used to link
strategic goals with initiatives is the Hoshin X-Matrix (Gels 2005) where the
breakthrough objectives for a period of over three to five years are listed and linked
to another list of next year’s objectives which in their turn are linked to a list of
improvement initiatives that are connected with a group of metrics. This relation-
ship matrix is to a high extent imitated by the intervention matrix which was
proposed in Herron and Braiden (2006) as a tool to rank the correlation between
problems and tools along with processes and measures to help in the selection and
prioritization of interventions.
There are different approaches used in industry to classify CI projects and here
are some examples. The overall business system proposed by Hoerl (2004) clas-
sifies the projects into three types, just-do-it, Lean (if the solution is already known
as it was tried and tested before), and Six Sigma project (if the problem is complex
and the solution is unknown). Snee and Hoerl (2007) classified projects into Lean or
Six Sigma project as they suggested that Six Sigma approach is more suitable when
the focus is on value adding transformations, whereas Lean principles are more
effective when dealing with material and information flow. Some companies apply
Lean and Six Sigma separately, in a stage after another or in parallel. A LSS model
proposed in (Crawford 2004) shows how Six Sigma can first be applied to improve
the processes effectiveness followed by Lean to improve the system efficiency.
However, Snee (2005) suggested that Lean tools can be very effective in the first
stage of process improvement where the aim is to eliminate waste and simplify
processes before starting to tackle the more difficult problems through optimization
and process control aimed mainly at process steps. Bevan et al. (2006) also
indicated that Six Sigma is approached faster if Lean has already eliminated
non-value added steps. Su and Chou (2008) categorized projects after mapping the
risks versus benefits into a range from low-hanging fruits through green and black
belt projects to laborious projects. Other companies study the impact versus the
difficulty of a project to classify its urgency and whether it should be done soon or
not. A LSS model presented in Kiemele (2005) uses VSM as a trigger for project
selection and classification into strategic or tactical type projects. Similarly, orga-
nizations implementing Lean as a lead methodology use VSM as a starting point for
project selection and classification where the selected VSM itself results in a
number of opportunities or projects and a decision is made to classify these projects
or opportunities into Kaizen events which vary in duration and complexity,
Six Sigma projects, just-do-it, etc.
Here are some comprehensive recommendations (which extend and add to the
works mentioned above) for how the framework (proposed in this section) for
project selection and prioritization is developed (Fig. 8.4):
• It needs to have a holistic perspective aligned with the organization’s strategic
goals.
• It needs a clear structure of tools such as project accumulators and prioritization
matrix.
Fig. 8.4 A proposed framework or structure for project selection and prioritization
• It needs to have a project accumulator that collects all ideas of CI projects from
different sources (Fig. 8.4) prior to any selection or prioritization.
• It needs to use the key five to eight prioritization factors that are most relevant to
the business needs and nature (which may change overtime) in the form of a
selection and prioritization matrix (Table 8.2) with weights that are relevant to
business needs.
• It needs to be an objective approach that considers prioritization factors such as
cost to operation, economy, cost reduction, budget gaps, cost avoidance, cash
flow, working capital, margin, growth, capital required, COPQ, capacity,
resources required, resources availability, resources utilization, availability of
data, capabilities integrity, additional effort resulting from change, commitment,
change difficulty, timing, risks, leadership and employee views, complexity,
chronic nature of problem, knowledge gain, benefits, measurability, feasibility,
ability to quantify, difficulty to expect factors, success probability, impact, results
time frame, leveragability, manageability, safety, customer and employee issues,
market change, CTQ, health, legality, regulations, KPIs, DPMO, cycle times,
productivity, process stability, capability, performance, and benchmarking.
• It needs a mechanism (list or matrix) to assign a project to the next available
resource.
• Companies may apply both top-down and bottom-up approaches to have a
holistic project selection approach where ideas are filtered as part of strategic
planning.
• Projects follow LSS DMAIC (no classification). Project’s nature determines the
tools (i.e., VSM, quick fix, and standardization).
It is recommended for organizations to conduct a strategic initiative planning
session involving all employees to develop a list of potential projects which are
collected in the project accumulator and to select the prioritization factors which are
most critical and relevant to the business needs. After that, it is recommended for all
selected projects to follow LSS DMAIC in order to avoid troubles in allocating
resources, selecting the right methodology, and proving the financial gains. Suitable
LSS tools (including VSM which is effective at the start of implementations) are
selected based on the nature and goals of the projects. Thus, no classification of
projects is required especially prior to the beginning of the project. The Define
phase determines the nature of the project and the tools needed. Not all of DMAIC
phases will be major milestones in a project since some may focus mainly at fixing
measurement systems or standard procedures without extensive analysis. Finally, a
high-level integrated framework for LSS CI, project selection and prioritization,
and other business blocks was presented in Chap. 3 (Fig. 3.1).
8.3.2.2 Culture Change Management Considerations
One of the main barriers in CI is people’s resistance to change. Thus, for any
organization, culture change management (which is a key component of initiative
140
Table 8.2 Project selection and prioritization matrix

Name of factora F1 F2 F3 … FN Calculated projects ranks for prioritization and assignment to next available resource
Importance weightb W1 W2 W3 WN from another list of resources
Potential project 1 S11 S12 S13 S1N Rank of project
relative scoresc 1 = (S11 W1) + (S12 W2) + (S13 W3) + + (S1N WN)
relative scores 2 = (S21 W1) + (S22 W2) + (S23 W3) + + (S2N WN)
relative scores 3 = (S31 W1) + (S32 W2) + (S33 W3) + + (S3N WN)
⋮
Potential project X SX1 SX2 SX3 SXN Rank of project X = (SX1 W1) + (SX2 W2) + (SX3 W3)
relative scores + + (SXN WN)
a
5–8 most relevant factors to the needs of the organization are selected; N = 5,6,7, or 8
b
W = 1, 3, 6, or 9, cS = 1, 3, 6, or 9
8 Integrated Company-Wide Management System (ICWMS)
management) is important. Effective culture change management is a prerequisite

for success in the implementation of ICWMS, the setup of a total company-wide
quality and change-flexible culture and the management of CI. ICWMS strengthens
the people and system approach to improvement. ICWMS culture is a culture of
cooperation, innovation, TQ, alignment, BE, and CI. To establish ICWMS culture,
it is important to understand the differences between ICWMS and traditional MSs’
practices (Chap. 9).
A major problem experienced in many CI initiatives has been the failure to
implement change (Gunasekaran 2006). CI is an organization-wide process of
change that requires a supportive structure of organizational learning, which
includes processing data, acquiring knowledge, and changing behavior (Savolainen
and Haikonen 2007). One way to eliminate waste in a process is change man-
agement (Anderson et al. 2006).
In the literature, there are several considerable factors mentioned in relation to
the effective change management (Beer et al. 1990; Walton 1990; Castle 1996;
Kaye and Anderson 1999; Beer and Nohria 2000; Claver et al. 2001; Seen et al.
2001; Wilkinson and Dale 2001; Coronado and Antony 2002; Evans and Lindsay
2002; Stankard 2002; Smith 2003; Johnson 2004; Kwak and Anbari 2004; Motwani
et al. 2004; Sirkin et al. 2005; Bititci et al. 2006; Buch and Tolentino 2006;
Dahlgaard and Dahlgaard-Park 2006; Hilb 2006; Oakland and Tanner 2006;
Antony 2007; Savolainen and Haikonen 2007; GE Capital Solutions 2008; Herron
and Hicks 2008; Townsend and Gebhardt 2008). To summarize, here are some
keynotes on effective change management:
• Continuously share the benefit, gap and reason for change across the
organization.
• Share the vision, spread change without forcing, make it last and monitor
progress.
• Use an evolutionary (not revolutionary) strategy-based tactic to transform from a
bureaucratic to a quality culture. Plan for a continuous and systematic change.
• Eliminate fear and stress, treat problems as opportunities, and blame the
processes.
• Educate (include all needed disciplines such as health, safety), empower,
involve, spread a culture of learning (adopt best practices and standardize) and
flexibility to change across all levels of the organization, and refine it
continuously.
• Establish an information system and visual MS to support change; build MSs
with the objectives of QC, quality assurance and respect for humanity.
• Instil passion and commitment to change and CI in leadership.
• Instil passion for quality and teamwork values across the organization;
encourage correct aligned behavior with successful implementation of perfor-
mance measures, incentives, and symbolic rewards. Align the needs with
operation and culture.
• Install a horizontal structure in addition to vertical and encourage process

thinking.
• Use facts and good two-way communication when making decisions and use
effective asking and listening while achieving consensus among team members.
• Use a standard approach to prioritize, measure, stabilize, control, streamline,
improve, document, and certify the different processes.
• Build a daily MS based on understanding problems and performance mea-
surements. Perform constructive evaluation and build a relationship of trust and
win-win.
• Partner with the best few suppliers and focus on what pleases the customers.
• Empower people and assign them to new responsibilities and this will drive new
behaviors and boost their attitude and morale.
• Focus in a balanced way on both financial or technical aspects and human
values.
• Use a common language, proper resources, and cross-functional teams.
• Consider using external coaches for facilitation and consider soft and hard
factors.
• Focus on leadership role, strategic and operational issues, people contribution,
and project and process management approaches. Choose qualified change
leaders.
Also, here are some important features of ICWMS culture:
• Senior leaders are passionate and committed to change and CI. They empower,
train, and involve employees to set up direction for the organization and per-
formance measures. They encourage innovation and responsibility toward
customers and society.
• The organization engages employees and empowers them through participation,
performance-based incentives, and decentralization. It develops them through
regular performance evaluations where opportunities are identified for training
and growth.
• Innovation is encouraged and the culture is open for change and flexible for
improvements. Processes are blamed for defects and not the employees.
Employees are encouraged to improve, and when positions are threatened to
disappear as a result of improvements, extra employees are deployed to do other
needed jobs such as being promoted to a CI leader job. Incentives are based on
performance and they drive the right performance which is aligned with the
interest of the organization at large. The human element is carefully studied
when change plans are developed.
• Align employees to strategic initiatives, train them to solve root causes, and
equip them with right tools. Motivate employees through trust, guidance, and
cooperation.
• Employees are treated as a participating partner in a win-win relationship (they
are trained, asked instead of being told, and empowered to excel in their jobs).
• Organizations recognize that for the employees to be motivated in their work,

they need to be encouraged to improve their own value. This includes education
and training to grow in more than just the one specific skill of the employee job.
• Cultural changes are key components of initiative management and CI
implementation.
Research hypotheses and prepositions related to implementing ICWMS culture
are developed in Sects. D.2 and D.3. They are used in validating ICWMS in
Sect. D.4.
8.3.3 Daily Quality Management
Daily quality management (or operation quality management) is about following up

with the people who execute the assigned tasks (which are related to projects and
operations plans) on a daily or regular basis, to ensure the tasks are being done
properly. Through daily quality management, all people clearly understand how
their day-to-day work affects the objectives of their company. Daily quality man-
agement is a communication and accountability method which sustains the
deployment of the strategic objectives. The area of communication management is
encompassed within daily quality management and quality project management.
Establishing a communication plan is identified as a key success factor to the
implementation of a CI initiative (Coronado and Antony 2002). A real-time
reporting system forms a basis for decision-making using measurements and data
systems (Haikonen et al. 2004).
A lot of companies have incorporated TQM and other CI approaches into their
daily quality management activities (Yang 2004). Deming emphasized the impor-
tance of daily CI (Walton 1990). The check–act part of the Deming cycle (i.e.,
PDCA) is the focus of daily quality management, where the check part of the cycle
is about evaluating the results and understanding the reasons for any deviations
from expectations and the act part is about taking corrective actions. The PDCA
management cycle is about building CI into daily quality management (Cheng
2008). Daily quality management is also about visual management and operations
quality management and it has three basic principles:
1. A problem well understood is half solved (inspired by the famous sayings of
Dewey ‘a problem well stated is half solved’ and of Aristotle ‘well begun is half
done’).
2. What gets measured gets done (a famous result from the Hawthorne studies)
(Newstrom and Davis 2002).
3. To truly engage people, they need to be informed and involved.
Within ICWMS, daily quality management is usually implemented ‘top down’
across the entire industrial organization and the frequency of meetings increases
from top to bottom. The meeting agendas and schedules are published, specifically
Fig. 8.5 Daily quality management
defining the measurements that are to be presented by subordinates. The required

actions are recorded, and if they are not completed by the next meeting or there are
variances, subordinates record the status using daily quality management sheets or
forms designed for that purpose, in order to stay on track. Daily quality manage-
ment includes the usage of other different tools, such as visual problem queues,
daily area KPIs, and operator’s skill-scheduling matrices. Figure 8.5 explains the
flow of daily quality management.
8.3.4 Process Management
As known from the basic concepts of TQM, most activities done in business can be
defined, or thought of as processes connected together to form a system for work
(Snee 2004). These processes and their variations must be measured and understood
before they can be controlled and improved. Quality is the result of reliable pro-
cesses and it is better to build quality upstream in the process, than to try to control
quality downstream. Also, processes should be looked at from the perspective of the
customer and there should be equal attention given to the process, the people, and
the results.
Process management can be defined as a group of practices that provide better
stewardship of business processes, through the use of process measures, tools, and
documentation (Motwani et al. 2004). Process management is a method for man-
agers to select, organize, and manage the design, standardization, stabilization, and
improvement of processes. Process standardization means understanding it, docu-
menting it, and assuring its compliance. This includes sharing of best practices
through better communication. Stabilization of a process means implementing

in-process check-point measurements or input–output indicator points to control it.
Process improvement includes streamlining it and reducing its defects. This is what
QMSs are all about (Sect. 2.12 provided some details about QMSs). The success of
QMSs not only depends on the QS, including procedures and administration of
records, but also on their sensitivity to organizational behaviors, goals, and change
(Pheng and Alfelor 2000).
One of the ways to reduce and eliminate waste in a process is document man-
agement (Anderson et al. 2006). Undocumented tribal knowledge represents a core
competency that can retire, be transferred to another company, be hidden for job
security, or die with its owner. ISO 9000 defines standards as documented agree-
ments that include technical criteria used consistently to ensure products, materials,
and processes are fit for their use (Evans and Lindsay 2002). Documented criteria
are the focus of process management.
Stankard (2002) indicated that unlike other quality models, ISO standards are not
considering profitability, strategy, and financial risks. This indicates that the
implementation of ISO standards on its own is not sufficient. A QMS such as ISO
9000 should not be considered as a substitute for a CI methodology and a
philosophy such as TQM, but they both need to be integrated to improve the
business performance (Sun 2000). A survey done in Wessel and Burcher (2004)
showed that many small- and medium-size enterprises, which claimed to have a
QMS such as ISO 9000 in place, did not have enough elements of process man-
agement implemented. The process MS includes documentation and is more
comprehensive than QMSs. It encompasses the elements of QMSs to achieve the
ISO 9000 certification as an example.
Generally, QMSs may have some of the following disadvantages: high docu-
mentation and administration effort, costs and being a fixed system (Pfeifer et al.
2004). However, the documented QMS should be simplified as much as possible to
avoid bureaucracy, over-complication, and excessive documentation (Kaye and
Anderson 1999). It should be built over time starting with the most critical
processes to success.
The management of a process depends on documentation as a way to understand
it. Process documentation can take the graphical form of flowcharting or mapping at
one of three different levels (Ungan 2006). However, in ICWMS, process mapping
is presented as part of a five-tier process for documentation which includes the
different levels of mapping. The Process Classification Framework (PCF) published
by the American Productivity and Quality Centre (2008) can help guide the
documentation of the tiers of the business as it generally describes the different
processes used to run a business. For the first tier, the framework uses two groups of
high-level processes: core value processes for operation and the enabling processes
for management support (Table 8.3).
Risk management is based on risk traps such as legal, financial, cultural, and
market-related traps (Hilb 2006). Risk management can be thought of as part of
process management where the process documentation of standard procedures can
include aspects of risk mitigation, mistake-proofing, and elimination. Compliance
Table 8.3 A template for high-level (tier-1) processes including core value-chain and value-
enabling processes as adapted from the Process Classification Framework (PCF) published by the
American Productivity and Quality Centre (2008)
1 Implement ICWMS to achieve organizational excellence by managing knowledge,
improvement, and change
2 Build the reputation and brands
3 Innovate and manage products and services
4 Market and sell products and services
5 Produce and deliver products and services
6 Manage customer service
7 Manage human resources
8 Manage information technology
9 Manage financial resources
10 Manage environmental, health, and safety
11 Acquire and manage properties and equipment
12 Manage external relations
management is also part of process management. Process management and

improvement is stimulated by activity-based approach starting from the organiza-
tion cost model (Kaplan and Norton 2006). Financial management is seen as part of
process management for accounting and it intersects with daily management.
8.3.4.1 Process Management and TQM
TQM became more popular as organizations started to integrate quality into their
MSs (Evans and Lindsay 2002). TQM encompasses all QI efforts in a company
(Harnesk and Abrahamsson 2007), which can help organizations strategically
achieve integrated management (Soltani and Lai 2007). ICWMS can be seen as an
expansion for TQM and as a new evolution. QM and CI methodologies, such as
LSS, QMSs, safety MSs, environmental MSs, MBNQA, TQM, are all encompassed
by the process management component. This is the core foundation component of
ICWMS which affects, and is linked to, all other components.
8.3.4.2 Steps of Process Management
Here are the steps which explain the flow of process management (Fig. 8.6):
1. Assign ownership and define responsibilities: Typically, there is an operating
policy for each high-level ‘first-tier process’ of the business (i.e., engineering,
sales, production, human resources) that is defined to explain the accountability,
ownership, responsibilities, and boundaries.
Fig. 8.6 Process management
Table 8.4 Process maturity evaluation as modified from (Carnegie Mellon Software Engineering
Institute 2002)
Maturity Rank Description
level
Initial 1.0 Inconsistent (not documented)
Starting 2.0 Started management and documentation
Documented 2.5 Documentation is done and communicated
Managed 3.0 Performance is in compliance with documentation (standard
practices are being audited)
Monitored 3.5 Process measurements are being monitored to identify opportunities
for improvement
Stable 4.0 Process measurements indicate stability and prediction
Optimized 5.0 Process measurements indicate capability and customer satisfaction
2. Select key processes: The focus in process management is on improving the

processes that are selected using a prioritization matrix and that have the greatest
impact on customer satisfaction and strategic goals. A process might have dif-
ferent levels of maturity as it may not be standardized, or standardized but not
stable (Table 8.4).
3. Improve the prioritized processes using LSS and other suitable tools. Process
mapping in the form of VSM or swim-lane chart is the main tool used for the
second tier.
4. Develop procedures (lower-level mapping using third-tier process flowcharts)
and work instructions in the fourth tier (which describes the step-by-step
procedure including risks and critical steps). The fifth tier consists of any sup-
porting documents such as the forms to be filled as indicated in the work
instructions in the fourth tier.
5. Implement improvement actions using the Deming cycle including check and
act where part of check is to do measurements of the process characteristics such
as efficiency and effectiveness in order to understand process capability and
drive actions.
8.3.5 Quality Performance Management
Quality performance management is concerned with defining employees’ roles and

the continuous communication during the year, which links the individual perfor-
mance to the organizational needs along with the evaluation and appraisal of per-
formance. It is about connecting the abilities of employees with the strategic quality
objectives of their company. The effectiveness of performance is measured through
quality performance management on the individual and business levels, using tools
such as incentives plans, calendars of commitments, organizational quarterly
reports, and performance reviews.
Quality performance management intersects with strategic quality management,
since it is also about BSC management and the use of KPIs. Basu (2004) included
the selection and application of KPIs as part of quality performance management.
Another aspect of quality performance management is the corporate aspect, which
was traditionally focused on reducing costs at the expense of competitive perfor-
mance. The BSC helped introduce longer-term profit growth. Future trends are
showing that for companies to effectively manage their performance, they need to
develop their process capabilities, through improving their resources (Bourne et al.
2003).
Also, quality performance management intersects with quality project manage-
ment which is related to change management. Successful implementation of mea-
sures of performance, through cultural change, can lead to a management style that
is more participative and consultative and can drive CI (Bititci et al. 2006).
According to Harrington (1995), Ishikawa (1984) indicated that the best way to
improve employee performance is through their empowerment and training.
Incentives are a key part of quality performance management and improvement.
The main purpose for incentives is to motivate employees. They should reward, in a
balanced way, based on individual and team performance, to encourage improve-
ments and team spirit.
Knowledge management is a part of quality performance management, daily
quality management, and quality project management. Basu (2004) introduced
knowledge management which included communication, training and development
of people. The management of timely information will optimize the overall

performance of the organization and enhance the rates of improvement. Quality
performance management, along with capturing ideas from employees and acting
on them, is a way to enhance employee involvement in improving the business
In a study done by Karia and Asaari (2006) on the relationship between the effect
of TQM practices and people’s attitude, it was found that training, education,
teamwork, CI, and empowerment have a significant impact on people’s involve-
ment, satisfaction, and commitment to the organization. Hence, quality performance
management intersects with process management. TQM depends on how effective
an organization manages its human resources (Morrison and Rahim 1993). Out of
various aspects of individual HRM, Yang (2006) found that training, incentives,
and development had the greatest impact on TQM.
Similarly, ICWMS heavily depends on the social aspect of human resources, as
it strengthens human relations and facilitates cultural change. The increased
attention to TQ had emphasized the importance of the human aspects of work
included in human resource management (Evans and Lindsay 2002). Identifying
leaders of the future and focusing on equipping them with the right tools to prepare
them for leadership roles is another key factor for success in quality performance
management. HRM is a key part of quality performance management, which has
three yearly phases:
1. Define job responsibilities, desired skills and attributes, goals and objectives
(measurable and consistent with strategic quality objectives) and development
plan. The development plan includes the definition of an incentive program or a
reward scheme related to the individual and the collective efforts of employees.
This will motivate them to achieve quality performance improvements in their
departments as well as the organization as a whole and to ensure alignment
toward the company objectives. This program is based on the cash flow, overall,
and personal performance results as well as BSC results such that it rewards
from a balanced perspective, not to the detriment of other key success factors
(e.g., productivity versus quality or safety). Also, defined tasks help reduce
duplication of efforts.
2. Conduct interim quality performance reviews of progress against objectives and
development plan at least once a year. It is often recommended in these reviews
that the subordinate presents a self-assessment with supporting facts and data.
3. Conduct a year-end review or appraisal of performance against goals, objec-
tives, and demonstrated skills and attributes. A development plan relating to
shortcomings with respect to skills, knowledge, personal plans, and attributes is
documented and it is also recommended in this review that the subordinate
presents a self-assessment. Figure 8.7 explains the flow of the quality perfor-
mance management component.
Fig. 8.7 Quality performance management
8.4 Auditing of ICWMS
The establishment of an assessment method is critical to success in implementing

ICWMS. It can simply take the form of an assessment sheet, where scoring criteria
can be used to guide an organization through the deployment and maintenance
process of the system. The following is a description of the criteria for each
component of the system:
1. Strategic quality management: The criteria include the documentation and
understanding of the vision, mission, values, strategies, and objectives. They
also include the use of BSC, by the people at different levels of the organization,
as well as the continuous communication and commitment.
2. Quality project management: The criteria contain the charter and execution of
initiatives including proper project and team selection. They also include the
application of change or transformation methodology, the involvement of
people in establishing initiatives, conducting regular reviews, MS documenta-
tion, and proper communication.
3. Process management: The criteria include process documentation and mapping
across the different business levels (containing the identification of responsi-
bilities and policies, as well as the use of points of measurements including
KPIs). They also include the use of CI methodologies and tools, the continuous
monitoring of processes, and the overall standardization and certification.
8.4 Auditing of ICWMS 151
4. Daily quality management: The criteria include documenting and executing

daily plans, scheduled meetings (to review KPIs and progress) conducted at all
organizational levels and the understanding of how people’s daily work can
impact the business.
5. Quality performance management: The criteria include the documentation of
individual performance improvement plans, conducting performance reviews at
all levels of organization regularly, management evaluation by employees, the
communication of commitments, training plans and their application,
performance-based salary increases, and the standardization of all processes.
Based on these criteria, a scoring system can be easily developed to indicate how
an organization is performing, with regards to ICWMS, using an index that is based
on a five-point scale. Each MS of the five listed above is assigned a score out of five
points. The total audit score is the average of the five scores of these five MSs.
Table 8.5 shows an index which can be used in the auditing process. This index
represents a quantitative and objective assessment of how close a company is to
fully achieve ICWMS culture. The use of this index has an advantage over the use
of subjective questionnaire assessments, which may include some bias from the
participants. This index also helps in understanding and translating the definition of
ICWMS into a road map to facilitate its implementation (Fig. D.1 and Table D.6).
8.5 A Proposed Framework for ICWMS
To further understand ICWMS from a high-level perspective, Tables 8.6 and 8.7
show some deliverables and examples of the outcomes of ICWMS and its
components.
Additionally, (8.1)–(8.3) can further explain ICWMS and how it relates to QM
and CI methodologies as well as MS components. According to Yang (2004),
Lucas (2002) proposed the following based on observation of many firms:
Current business system þ Six Sigma ¼ TQM ð8:1Þ
In this context, it is proposed that:
Table 8.5 ICWMS five-level index

ICWMS index Performance level
1 Not existing, not established, or not communicated
2 Partially established and partially communicated
3 Mostly developed to a good and steady level
4 Developed, mostly understood, and evolving
5 Standardized best practices documented, understood, and followed
Table 8.6 Deliverables of ICWMS and its components

Stakeholder System Deliverables
Business owner Strategic quality Strategic plan to achieve expectations
Customers management Satisfaction
Employees Alignment
Business owner Quality performance Excellent operations
Customers management Satisfaction
Employees Growth and satisfaction
Business owner Quality project Monitoring of progress and
management achievement
Customers Satisfaction
Employees Sense of achievement and growth
Business owner Daily quality management Continuous control and progress
Employees Sense of empowerment, growth and
satisfaction
Business owner Process management Improvement
Employees Sense of excellence
Government Compliance to regulations
agencies
Registration Compliance to standards
organizations
Business owner ICWMS Achievement of expectations and
improvement
Employees Alignment and growth
TQM þ additional CI methodologies þ additional MS components ¼ ICWMS

ð8:2Þ
After substituting (8.1) into (8.2) and adjusting the other parts:
Current business system þ other additional MS components þ Six Sigma þ Lean

þ other additional CI methodologies ¼ ICWMS
ð8:3Þ
Thus, ICWMS can be seen as an expansion for TQM. The components of

ICWMS follow Deming’s PDCA cycle as depicted in Fig. 8.8. The strategic quality
management simulates the Plan part, the quality project management simulates the
Do and Check parts, the daily quality management as well as the quality perfor-
mance management simulate the Check and Act parts, and finally, the process
management part is the core and base part of the system which supports all of the
8.5 A Proposed Framework for ICWMS 153
Table 8.7 Examples of outcomes from the components of ICWMS

System Examples of outcomes
Strategic quality Strategic plan
management Understanding of SWOT
Mission, vision, and values
Quality performance Personal and team performance evaluations
management BSC and incentives
Operational performance evaluation
Project management Project charters
Implementation of strategic initiatives
Daily quality management Visual workplace
Extensive communication (agenda, minutes, corrective action
plans, etc.)
Process management ISO certification
Environmental compliance
Financial savings
Standardized processes
Fig. 8.8 ICWMS

components and Deming’s
PDCA cycle
PDCA parts since all activities are governed by process documentation manage-
ment. A high-level structure that shows the different integrated components of
ICWMS is presented in Fig. 8.9. It shows how process management can be thought
of as the core of the structure, which encompasses QM and CI methodologies and
intersects with all of the other MSs.
Figure 8.10 explains the integrated framework for ICWMS by presenting the
key building blocks in the business and how they are linked together. The process
management block is the block in the base which plays a key role relative to all
Fig. 8.9 A high-level structure of ICWMS
Fig. 8.10 An integrated framework for ICWMS. Note HSSER stands for Health, Safety, Security,
Environment, and Risk
8.5 A Proposed Framework for ICWMS 155
other blocks. The alignment, operational excellence, and customer satisfaction

block on the top represent a key goal for ICWMS. All forms of management
including strategic quality management, quality project management, daily quality
management, and quality performance management are directly connected to the
process management base block. QM and CI methodologies are encompassed by
the process MS. The training component is stressed by being introduced as a block,
and finally, the change leadership and culture building is an important component
of this framework. These two components aim at strengthening the human element
of this framework. Thus, this framework achieves an integration of management
principles, improvement methodologies, implementation practices and cultural
change. Tables D.1, D.3, and D.4 validate and prove the effectiveness of ICWMS in
achieving substantial performance improvements.
Strategic quality management represents the direction toward the goals of the
system. Quality project management supports the strategy deployment. Daily
quality management and quality performance management support the strategic
initiatives. Communication and knowledge management are the extended area
across daily quality management, quality project management, and quality perfor-
mance management. Process management is the quality-encompassing foundation
as everything in a company runs as a process.
The implementation of ICWMS is illustrated through two empirical case studies, at

Company A and Company B. These case studies were carried out using real
industries to verify the theoretical model through a contrast of the scenarios before
and after the implementation. They were conducted in three phases: model design,
implementation, and evaluation. During the study, validity was pursued by using
triangulation and theory to help maintain the cases under control. The comparison
of measurements of performance before and after improvements is very important
to objectively assess a change process (Seen et al. 2001). For the two studies, BSC
KPIs were selected and monitored, to be used in the benchmarking and compar-
isons. In addition, the index for measuring the maturity of an organization’s
application of all aspects of ICWMS was audited by supervisors. Moreover, the
results from the CEO interview in the case of Company A and from the employee
survey in the case of Company B were analyzed to evaluate the implementation.
The data obtained from all of these evaluation approaches was used to test the
developed hypotheses concerning the implementation of ICWMS and validate the
theoretical model.
The first case study is about Company A, which is a Canadian manufacturer of
specific fabricated wood products. The company started the implementation of all
of the elements of ICWMS, including BPR and LSS, in 2004. Prior to that, the
company only had a few Six Sigma projects implemented, but no formal MS. As
part of the implementation of ICWMS, various changes were actually introduced to
the company which included using cross-functional teams for strategic planning,
conducting benchmarking studies, developing strategic initiatives, using quality
project management approach, establishing new communication plans and daily
meetings, using visual management, using a five-tier process documentation and
standardization framework, using LSS and BPR, and using a quality performance
management approach with focus on training.
The maturity of the implementation of all aspects of ICWMS was audited and
monitored. The results of these audits indicated that all elements of ICWMS were
effective in the implementation (Fig. D.1). The results of the implementation in
Company A showed improvements such as the 20% in the BSC KPIs results, the
turning of the financial situation from being non-profitable in the order of hundreds
of thousands of dollars into becoming profitable in the order of millions of dollars,
67% in regional market share, 21% in gross margin, 20% in productivity, 13% in
customer satisfaction, and 36% in the employee survey results (Tables 8.8 and
D.1).
The second case study described in Appendix D was conducted at Company B,
which is a Canadian manufacturer of paper products. In 2005, the company was
introduced to ICWMS and the benefits were starting to be realized in 2006. The
circumstances were helpful as people were willing to try the new system in hope for
a major improvement and change from the inferior circumstances they were
experiencing. As part of the implementation of ICWMS, various changes were
actually introduced to the company which included using cross-functional teams for
strategic planning, conducting benchmarking studies, developing strategic initia-
tives, using quality project management approach, establishing new communication
plans and daily meetings, using visual management, using a five-tier process
documentation and standardization framework, using LSS and BPR, and using a
quality performance management approach with focus on training.
The maturity of the implementation of all aspects of ICWMS was audited and
monitored. The elements of ICWMS which were most effective in the implemen-
tation were the strategic, initiative, and performance MSs (Table D.6). Company B
showed improvements such as the 23% in the BSC KPIs results, 10% in flexible
budget, 30% in the internal rejects, and 182% in people recordable safety incident
rate (Tables 8.9 and D.3). In addition, self-administered employee surveys were
conducted to assess total alignment, leadership, communication, and motivation. In
this case study, the coverage of the proposed survey to the studied matter has been
validated by the author. However, it is worth noting that the survey has limitations
due to participants’ subjectivity, participation rates, and turnover. Overall, the
average evaluation score increased by 15% pointing toward a quite meaningful and
favorable response which reveals another evident indication of the ICWMS effec-
tiveness (Tables 8.9 and D.4). This result was also verified through the paired t-test
conducted to compare the 24 survey items or data points of 2004 to the 24 data
points of 2007 (Table D.5 and Fig. D.2) which showed that the means of the 2007
survey results were significantly greater than those for 2004.
8.6 Discussion of Implementation 157
Table 8.8 Comparison of measures results before and after the implementation of ICWMS
(Company A)
Measures Data sources Before After
Rate of improvement above BSC overall 31% (the average for 56% (the average
last year score 2004 and 2005 is 131/ for 2006 and
200) 2007 is 156/200)
Financial standing CEO interview Losing money in the Making money in
order of hundreds of the order of
thousands of dollars millions of
dollars
Productivity CEO interview Baseline 20%
improvement
On-time delivery CEO interview 26% 98%
Customer satisfaction CEO interview 60% 96%
Employee survey for CEO interview 55% 71%
motivation
Employee turnover CEO interview 30% 7%
Return on investment BSC (absolute) 83% 87% (i.e., 4%
improvement)
Gross margin % BSC (absolute) 83% 100% (i.e., 21%
improvement)
Regional market share BSC (absolute) 45% 75% (i.e., 67%
improvement)
Customer satisfaction BSC (absolute) 75% 85% (i.e., 13%
improvement)
Fleet utilization BSC (absolute) 65% 85% (i.e., 31%
improvement)
Turnover—indirect employees BSC (absolute) 0% 90%
Employee survey results BSC (absolute) 37% 50% (i.e., 36%
improvement)
% score achieved out of the BSC (absolute) 56% 82% (i.e., 46%
total weighted average (only improvement)
for the seven KPIs above)
Finally, the evidence from these two studies strongly suggests that ICWMS
helps optimize the business performance, productivity, cost, customer satisfaction,
alignment, employee motivation, and improvement rates (Appendix D).
According to contingency theory, there is not one single method for business
operation, which can be applied to all situations (Foster 2007). The use of only two
case studies is a limitation. However, the studies can be more reliable and less
biased by the use of more experiments in other industries to provide further per-
spective regarding practical execution problems. The assumption that ICWMS will
solve all industrial problems, wherever they are, is also a limitation since it may not
hold at another organization under different implementation challenges in terms of
structure, culture, circumstances, influential factors, etc. However, this system
requires and helps culture change and spreads a culture of innovation and
Table 8.9 Comparison of the BSC absolute results for same KPIs as well as the survey measures
before and after the implementation of ICWMS (Company B)
Measures Before (%) After (%) % improvement (after
implementation compared
to before) (%)
% of flexible budget 86 95 10
Total suspended solids 58 75 30
Production line in-house rejects 90 100 11
Production/operating day 77 79 3
People recordable safety incident rate 26 73 182
Total BSC score 66 82 23
Total alignment survey score 59 77 30
Total communication survey score 66 70 6
Total leadership survey score 64 80 25
Total motivation survey score 73 77 5
Average for all survey measures 66 76 15
flexibility. It is important to note that the management commitment, communica-

tion, organization effort and cooperation, culture management, proper deployment
and strong leadership are key factors for successful implementation. Also, an equal
effort should be spent on the people to transform the culture and not only on CI
projects.
This chapter provided a comprehensive and precise study of the five ICWMS
components which added a new understanding to MSs. A road map was provided
for each of them as well as a framework for the whole system to clarify how this
system can be developed. This framework explains the relation and grouping of
these components.
More discussion was also provided on the deliverables of ICWMS and how to
perform its auditing which further explains its development. The grouping and
connection of these components with each other represent the novelty of the pro-
posed approach, i.e., ICWMS. It is because of these groupings and connections that
ICWMS provides a solid infrastructure for managing and improving processes.
ICWMS components simulate Deming’s PDCA cycle. QM and CI methodolo-
gies, such as LSS, QMSs, safety MSs, MBNQA, TQM, are encompassed by the
process MS. This is the core and base ICWMS component linked to all other
components.
There is now a variety of enterprise-wide management information systems
available in the market which can fulfill the needs of different functions of a
business. The work in this chapter had been cited by Stadnicka and Antosz (2015)
as part of their research on Kaizen and continuous improvement practices. The
findings of this chapter represent an addition to previous works1. They could be
easily adapted and extended in the enterprise-wide management information sys-
tems. Appendix D describes the implementation of ICWMS using two actual case
studies to verify the ICWMS model quantitatively and qualitatively through a
comparison of a pre-application and post application status (Tables D.1, D.3, and
D.4). KPIs are selected, monitored, and used in the comparison as well as in
benchmarking. Also, an index for measuring the maturity of an organization’s
application of all aspects of ICWMS is audited and monitored (Fig. D.1 and
Table D.6). The next chapter discusses ICWMS comparison with other manage-
ment and QS models.
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Chapter 9
ICWMS: Comparisons to Other Systems
Abstract There are different integrated systems proposed in the literature. Some
deal with the integration of improvement methodologies with each other or with
other MSs such as ISO 9000. However, ICWMS is believed to be more compre-
hensive, as it integrates all aspects of managing and improving a business operation.
ICWMS practices correspond and compare to other MS models. This chapter
presents a link between ICWMS and other MS models.

Keywords Management System (MS) Integrated Company-Wide Management

System (ICWMS) Continuous Improvement (CI) Quality Management System

(QMS) Malcolm Baldrige National Quality Award (MBNQA)
European Foundation for Quality Model (EFQM)
9.1 Introduction
In what follows, a description of the different features of ICWMS and other MS

models is provided. Also, ICWMS practices, which correspond to other MSs, such
as the MBNQA dimensions and Deming’s 14 points for management, are dis-
cussed, and a comparison is provided of ICWMS and traditional MS practices. This
chapter includes findings and discussion of some of the most common and tradi-
tional MS models.
9.2 Comparisons
The principles of QM are universal. This is evident since there are numerous
common items in the different awards and MSs. However, differences are still
evident between them. For example, ISO has a lot in common with MBNQA, but it

https://doi.org/10.1007/978-3-319-99034-7_9
166 9 ICWMS: Comparisons to Other Systems
is not considered as a comprehensive business performance framework. It is criti-

cized for focusing excessively on formal documentation and not enough on vari-
ability reduction (as in Six Sigma). Also, many of the third-party consultants or
auditors are not well educated in technical quality tools. The return on investment of
the billions of dollars spent on ISO certification worldwide is not clear
(Montgomery 2001). On the other hand, ISO is stronger than MBNQA in product
and process control and is thus recommended as a good system for companies
starting to implement a QMS (Evans and Lindsay 2002). The EFQM lacks some
key drivers such as mission, critical success factors, and aims which are important
to focus management commitment and attention to the right direction (Kaye and
Anderson 1999).
ICWMS integrates MSs, QMSs such as ISO 9000, quality award models, and CI
methodologies. ICWMS encourages the use of self-assessment audits based on
quality awards, such as MBNQA and EFQM, as they help in achieving a com-
prehensive MS. These rewards aim at encouraging organizations to comprehen-
sively implement QI practices across their business systems. Table 9.1 shows the
different features and demonstrates the main practices of ICWMS and other MS
models. The five components of ICWMS encompass all aspects of managing and
improving a business. This includes, in one holistic ICWMS, most of the practices
of other MS models such as policies, leadership, customer focus, strategic planning,
people, information, improvement, stakeholders, operations, benchmarking, mea-
surements, HRM, analysis, processes, systems, control, standardization, effects,
quality, results, impacts, resources, suppliers, culture, training, and facts.
There are many items within ICWMS that are not addressed in MBNQA, such as
teamwork, work attitude, communication, internal and external cooperation, public
responsibility, SCM practices, policy participation, responsiveness, CI, and cor-
porate quality culture. Tables 9.2 and 9.3 list ICWMS practices which correspond
to MBNQA dimensions and Deming’s 14 points for management, respectively. It
can be perceived that ICWMS practices are in alignment with Deming’s manage-
ment philosophy and they are more comprehensive than MBNQA practices.
Evans and Lindsay (2002) presented differences, in the US businesses, between
TQ and traditional management practices which are based on the Adam Smith
principles of the eighteenth century and the Frederick Taylor work on management
(Keck 1995). Evans and Lindsay (2002) indicated that the understanding of these
differences is a way to establish a TQ culture (which is also part of ICWMS goals).
Similarly, using some dimensions from Evans and Lindsay (2002) and other
dimensions based on the literature review and the author’s own industrial experi-
ence, to establish ICWMS culture, it is important to understand the differences
between ICWMS and traditional MS practices as shown in Table 9.4. The findings
reveal that ICWMS practices are different from those of traditional MS in all
dimensions discussed. ICWMS culture is a culture of cooperation, innovation, TQ,
strategic alignment, BE, and CI.
Table 9.1 Main practices of ICWMS and other quality and MS models as adapted from (Kaye and Anderson 1999; Evans and Lindsay 2002; Jitpaiboon and
Rao 2007; Soltani and Lai 2007)
Deming prize MBNQA EFQM or Australian Quality Canada Award ISO 9000: Kaye and TQM ICWMS
criteria categories Business Award (AQA) or for Excellence 2000 QM Anderson practices component
Excellence Australian (CAE) by principles 1999 revised
Model Business National competitive
9.2 Comparisons
(BEM) Excellence Award Quality Institute CI model

categories (ABEA) (NQI) criteria
categories categories
Policies Leadership Leadership Leadership Leadership Customer Leadership Strategic strategic
focus quality quality
planning management
Organization Information People Policy and Customer focus Leadership Role of senior Top Quality
and its operation and analysis management planning management management initiative
support management
Education and Strategic Policy and Information and Planning for Involvement Stakeholders Supplier Daily quality
dissemination quality strategy analysis improvement of people focus quality management
planning
Information HRM and Resources People People focus Process Measurement Benchmarking Process
gathering, development approach and feedback management
communication,
and utilization
Analysis Management Processes Customer focus Process System Learning Employee Quality
of process optimization approach to from CI involvement performance
quality management results management
Standardization Quality and People Quality of process Supplier focus Continual Culture for CI Employee
operational satisfaction improvement and training
results innovation
(continued)
167
168
Deming prize MBNQA EFQM or Australian Quality Canada Award ISO 9000: Kaye and TQM ICWMS
criteria categories Business Award (AQA) or for Excellence 2000 QM Anderson practices component
Excellence Australian (CAE) by principles 1999 revised
Model Business National competitive
(BEM) Excellence Award Quality Institute CI model
categories (ABEA) (NQI) criteria
categories categories
Control/ Customer Customer Factual Employee Customer
management focus and satisfaction approach to focus focus/
satisfaction decision- orientation
making
Quality Impact on Mutually Critical Quality results
assurance society beneficial processes
supplier focus
relationship
Effects Business Standardize Leadership
results best practices/
QM system
Future plans Integration of
CI activities
9 ICWMS: Comparisons to Other Systems
Table 9.2 Explanation of the ICWMS practices corresponding to MBNQA categories

MBNQA ICWMS
Leadership Senior leaders are passionate and committed to changing for the
better. They involve employees at all levels in establishing direction
for the organization as well as measures of performance. They
empower, train, and encourage employees to innovate and be
responsible toward customers and society
Information and Communication is established through various means such as
analysis display screens, intranet networks, and regular meetings. Information
is readily available as needed. Data is collected and analyzed using
best technologies and tools, such as those within LSS, and is used as
a basis for decision-making with the involvement of employees.
Performance is measured and is visually communicated
Strategic quality Strategic goals are established through participative management,
planning using tools such as Hoshin Planning, BSC, and SWOT analysis,
where strategic initiatives are established, along with plans for
deployment and progress monitoring. Other tools used are project
charters, visual workplace, and action plans
HRM and The organization engages employees and empowers them through
development participation, performance-based incentives, and decentralization. It
develops them through regular performance evaluations, where
opportunities are identified for training and growth to spread a
winning culture of trust and motivation
Management of The organization focuses on the CI of all processes within the SC
process quality and starts at key critical processes, so as to control, streamline,
optimize, reengineer, document, audit, and certify using tools such as
the ones in LSS
Quality and The organization continuously measures performance to ensure
operational results alignment of operations with strategic direction. Some of the tools
used are BSC, regular meetings, and benchmarking. KPIs and units
PIs are visual and monitored to ensure targets are achieved and
corrective plans are implemented as needed
Customer focus and The organization uses QFD, benchmarking, and other tools, such as
satisfaction the ones within LSS, to establish customer requirements and
preferences. A strong relationship is built with the customer, through
aiming at loyalty and not only satisfaction
This chapter explained how ICWMS compares to other QMS and MS models
which presents an expansion to the previous works1. It presented the different
features and the main practices of ICWMS and other MS models. It was shown that
ICWMS is more comprehensive and encompasses most aspects listed under
1
Carretero, J. A. (2015) Total Company-Wide Management System (TCWMS): comparisons to
other systems. Int. J. Excellence in e-Solutions for Management, Vol. 5, No. 1, pp. 1–14.
Table 9.3 Explanation of the ICWMS practices corresponding to Deming’s 14 points

Deming’s 14 points ICWMS
Create a vision and demonstrate Develop a vision, mission, values, and strategic deployment
commitment plan. Leadership commitment to improvement is addressed
through acting on policies. The organization focuses on
customers and employees (win-win)
Learn the new philosophy The leadership communicates values and expectations. It
engages and empowers employees. The organization is flexible
and adapts with world changes and spreads a culture of
cooperation, trust, winning, and excellence
Understand inspection The organization measures performance and inspects the
quality of products. Measurement systems are analyzed to
ensure repeatability and reproducibility of measurements.
Then, reliable data is analyzed (using LSS tools within process
management) to assist in the improvement of products and
processes. The organization also focuses on moving from
inspection to building quality into the process and products
upstream, by mistake-proofing and quality awareness through
trained employees. Blame is always placed on the process and
not employees
Stop making decisions purely based Decisions are based on cost, quality, data, performance,
on cost intangible factors (such as employee morale and customer good
will), the benefit for the overall system of processes and
stakeholders, and through the participation of employees
Improve constantly and forever Improve daily and continuously monitor improvements.
Implement actions and corrective actions to ensure strategic
initiatives are successful, using the tools available in LSS and
process management. Institute a culture of CI, learning, and
innovation
Institute training Opportunities for employee development are identified in
regular performance reviews and employees are also
cross-trained to ensure they have proper knowledge to do and
improve the tasks assigned to them
Institute leadership Identify future leaders and use performance reviews to develop
and grow their knowledge and skills. Spread a culture of
cooperation, trust and empowerment where employees are
guided, engaged, and encouraged
Drive out fear Innovation is encouraged and the culture is open for change
and flexible for improvements. Processes are blamed for
defects and not the employees. Employees are encouraged to
improve. If positions are threatened to disappear, as a result of
improvements, extra employees are deployed to do other
needed jobs. For example, they are promoted to a process
improvement leader job. Incentives are based on performance
and they drive the right performance, which is aligned with the
interest of the organization in large. Leading change is a key
part of initiative management and implementation of
improvements where the human element is studied when
change plans are developed
(continued)

Deming’s 14 points ICWMS
Optimize efforts of teams Horizontal structure is established and cross-functional teams
are active. Incentives are structured in a way to encourage
individual excellence, as well as team excellence. Encourage a
culture of cooperation and involvement instead of competition.
Focus on both internal and external customers along the value
stream of products or services. Training is also used to
encourage teamwork
Eliminate exhortations posters Align employees to strategic initiatives, train them to solve root
causes, equip them with the right tools, and blame the
processes not people for defects. Motivate them through trust,
guidance, empowerment, and cooperation
Eliminate numerical quotas and Strategic management deals with management by facts, based
management by objective on reliable data, and also the participation of employees when
establishing targets and the means to achieve these targets.
Strategic management and process management encourage the
understanding and improvement of processes. Employees
participate in the planning of strategic initiatives and they are
guided through the initiatives implementation. Their
performance is continuously reviewed to ensure quality and
success
Remove barriers to pride in Employees are treated as a participating partner in a win-win
workmanship relationship, they are asked, instead of being told, and they are
trained and empowered to excel in their jobs
Encourage education and self Organizations recognize that for the employees to be motivated
improvement in their work, they need to be encouraged to improve
themselves. This includes education and training to grow in
more than just the one specific skill of the employee job
Take action ICWMS is about organization transformation into a culture of
cooperation, innovation, TQ, strategic alignment, BE, and CI
different MS models. It includes aspects of business management and improvement,

with the goal of business excellence and people alignment. Also, ICWMS practices,
which correspond to the MBNQA dimensions and Deming’s 14 points for man-
agement, were presented and a comparison was provided of ICWMS and traditional
MS practices. ICWMS practices are in alignment with Deming’s management
philosophy and they are more comprehensive than MBNQA practices. The findings
also revealed that ICWMS practices are different from those of traditional MS in all
dimensions discussed. The outcome of this chapter provides valuable knowledge to
the top management at any organization willing to embrace ICWMS. There is a link
between ICWMS and other MS models where QM and CI methodologies such as
LSS, QMSs, safety MS, MBNQA, TQM are all encompassed within ICWMS.
Finally, Chap. 10 provides summery and conclusions of the topics in this book as
well as future suggested topics.
Table 9.4 A comparison between ICWMS and traditional MS practices

Dimension Traditional MS ICWMS
Leadership Is rigid about change or ideas of Is passionate about and committed to
improvement, telling instead of improvement, engages, and
facilitating (Evans and Lindsay empowers employees to innovate and
2002) excel
Quality Defined as conformance to Is about continuous innovation and
specifications (Evans and Lindsay exceeding expectations and it is
2002) everyone’s motive while performing
a job
Customers Are only external and they are the Are thought of as being external and
responsibility of sales and marketing internal. They are the focus and
(Evans and Lindsay 2002) responsibility of all employees
Employees Are viewed as an interchangeable Are aligned with strategic direction,
commodity, passive contributors empowered, cross-trained,
doing only what they are told (Evans participating partners who fix
and Lindsay 2002) and typically problem root causes and work in
specialized in one skill teams
Reward system It only recognizes individuals, and Is both a financial and spiritual
hence, teamwork is discouraged, by system and it encourages correct
creating competition and conflict behaviors in an aligned direction. It is
between departments (Evans and both individual and team oriented
Lindsay 2002)
Information Communication is not formal or well Communication is continuously
established (i.e., information is not available where needed and
always available and often covers a information is ready through various
short period) means, such as visual management,
live data systems and pre-established
meetings
Knowledge Focuses on knowledge related to Focuses on knowledge related to all
manufacturing and engineering disciplines, including safety and
(Evans and Lindsay 2002) health
Maintenance Is reactively done by a specialized Is preventive and proactively done by
employee and no established process a local operator and standardized
is available procedures are implemented
Organizational Vertical and composed of separate Vertical and horizontal (following
structure independent specialized processes the function) and composed of
(Evans and Lindsay 2002) interdependent processes
Goals Is about win-lose and competition Is about win-win and cooperation
(Evans and Lindsay 2002)
Strategic No clear understanding of where the Standard process is followed to
quality company is today, where it is establish a strategic plan and a list of
management heading tomorrow or how to get strategic initiatives, with the
there. Decisions are often taken participation of employees to achieve
based on feelings, not on data or facts strategic alignment. Decisions are
(as in management by fact), and there made based on facts and there is also
is a lot of confusion, frustration, a two-way communication in the
management by excuses, and lack of process (management by fact plus
alignment two-way communication)
(continued)

Dimension Traditional MS ICWMS
Quality A lot of actions and initiatives fall Strategic initiatives are managed
initiative behind, due to failure in focusing on effectively and efficiently, through
management both processes and people and clear identification of goals,
improperly identified initiatives are measures, resources, teams,
not necessarily the priority responsibilities, and monitoring of
progress. Effective asking and
listening, as the focus is on achieving
consensus among team members and
their right is guaranteed to express
agreement or disagreement. This
fosters the right attitude and boosts
morale for success in any change
initiative and establishes a sense of
ownership
Motivation Is driven through control by Is driven through pride in own work
management and fear of making quality and through a culture of
mistakes by employees (Evans and encouragement not blame
Lindsay 2002)
Daily quality Time is wasted on blaming people Is based on good understanding of
management instead of dealing with problems; problems, good measurement of
people seem to be always in crisis performance and engaged workforce,
trying to fight problems and their through communication, including
symptoms by quick fixes without documentation, reporting, and
paying proper attention to root causes corrective feedback
(Kaye and Anderson 1999)
Process Improves processes or sub-processes Uses a standard approach to
management not systems of processes. Process prioritize, measure, stabilize, control,
improvement activities are streamline, improve, document, and
insufficiently integrated (Kaye and certify the different processes.
Anderson 1999) Quality is built into processes
upstream
Control Is achieved through pre-established Is achieved as a result of shared
inflexible roles laid down to the values and knowledge
people (Evans and Lindsay 2002)
Quality Low level of empowerment exists Is about empowerment,
performance (Kaye and Anderson 1999). No accountability, training, incentives,
management formal measures or reviews of identification of policies and
individual or department responsibilities, constructive
performance are established evaluation of performance and a
relationship built on trust
Supplier Suppliers are competing with each Focuses on partnership and
relationships other (Evans and Lindsay 2002) improvement of best few suppliers
Responsibility Managers direct employees, plan Managers empower employees to
their work, and inspect it (Evans and manage own work and facilitate the
Lindsay 2002) job for them
Competition Is focused on individual performance Is focused on what pleases the
customers both by individuals and
teams
References
Kaye, M., & Anderson, R. (1999). Continuous improvement: the ten essential criteria.
Keck, P. R. (1995). Why quality fails. Quality Digest, November, pp. 53–55.
Chapter 10
Conclusions and Recommendations
Abstract The most significant contribution of this book lies in the proposal and
validation of models for the integration of Six Sigma with other improvement ap-
proaches such as TQM, Lean, Kano model, QFD, Taguchi’s QLF, SCM as well as
other MSs to form a comprehensive ICWMS to achieve strategic alignment, effec-
tive CI, and society satisfaction. This chapter provides a summary of all previous
chapters’ conclusions and also provides a discussion of future recommendations.

Keywords Total Quality Management (TQM) Integrated Company-Wide

Management System (ICWMS) Continuous Improvement (CI)

Quality Lean Six Sigma (LSS) Supply Chain Management (SCM)

Quality Loss Function (QLF) Kano model Quality Function Deployment (QFD)
10.1 Conclusions
Mostly, each of the previous chapters in this book had its own section of conclu-
sions. The following conclusions are basically summaries of those previous
conclusions:
• Six Sigma and TQM share common grounds. They complement each other and
can be integrated where Six Sigma can be the extension that fits under the
umbrella of TQM and provides a well-built structure for achieving greater
improvements.
• Six Sigma and Lean are related, compatible and can be integrated to form a
superior methodology (LSS) that overcomes the shortcomings of each. A LSS
model was developed in a detailed and balanced way following the DMAIC
structure. LSS is an extension that can fit under the umbrella of TQM. The
effectiveness of the LSS integration was verified by conducting three real case
studies based on the author’s actual work involvement and implementation
experience (Appendix A).
• An integrated approach for DFSS (Kano-based Six Sigma) was proposed to help
practitioners strategically understand the VOC. It included the use of different

https://doi.org/10.1007/978-3-319-99034-7_10
176 10 Conclusions and Recommendations
powerful tools such as Kano model, QFD, and FMEA. All of these tools are
related and share common grounds in terms of solving customer problems to
achieve customer satisfaction. They can be integrated together, within DFSS, to
form a superior methodology to new product innovation and development. Kano
model strengthens DFSS and brings an intelligent approach to understanding
and prioritizing customer requirements. QFD helps translate these requirements
into technical requirements and prioritizes them. Cause and effect diagram and
FMEA are effective for understanding the problems. Some additional tools that
can be used in the proposed model include Taguchi’s QLF which is used to
relate the product characteristics to its quality performance, prioritize initiatives
and quantify quality the loss to society, TRIZ which assists in conceptualizing
solutions, AHP which helps in choosing the best alternative solution and DOE
which aids in optimizing the process response. In addition, a case study which is
based on the author’s work experience was used to demonstrate the model’s
implementation (Appendix B).
• An integrated approach for DMAIC was proposed to help practitioners strate-
gically understand the implementation of LSS in SCM. LSS and SCM share
common grounds in terms of solving customer problems. They also complement
each other and can be integrated, using DMAIC, to achieve customer satisfac-
tion. SCM can utilize the LSS principles, such as focusing on adding value to
customers, reducing defectives and wastes, and streamlining value flow. An
actual case study (Appendix C), which is based on the author’s actual work
involvement, provided an example of how LSS (including VSM as a key tool)
can be used to improve a real SC. It showed how SCM can utilize LSS, QM, and
CI principles in order to achieve high levels of customer satisfaction regarding
cost, quality, and delivery.
• The integration of QM and CI with MSs (into ICWMS) represents an evolution
that will provide a solid foundation for all business activities, to ensure that
proper alignment exists resulting in the optimization of resources and the
enhancement of the performance of the organization. The use of such a
well-structured system that engages the entire organization into CI is essential to
survive and stay competitive. A description was provided for some of the
benefits, requirements, and foundations needed for successful deployment of CI
methodologies, which are ICWMS related.
• ICWMS is a comprehensive MS which consists of five main MS components:
strategic quality management, quality project management, operation quality
management, process management, and quality performance management. The
grouping and connection of these five components with each other represents
the novelty of the ICWMS. It is because of these groupings and connections that
the ICWMS provides a solid infrastructure for managing and improving pro-
cesses. ICWMS can be seen as an expansion of TQM. QM and CI method-
ologies, such as LSS, QMSs, safety MSs, environmental MSs, MBNQA, TQM,
are all encompassed by the process MS. This is the core foundation component
of ICWMS which affects, and is linked to, all other important MS components.
10.1 Conclusions 177
• A roadmap was provided for each of the five MS components of ICWMS as

well as a framework for the whole system to clarify how this system can be
developed. The framework was introduced to explain how the five components
can be grouped together and how they relate to each other. This framework
achieves an integration of management principles, improvement methodologies,
implementation practices, and cultural change. More discussion was also pro-
vided on the deliverables of ICWMS and how to perform its auditing which
further explains its development. ICWMS aligns people, processes, and projects
to the organizational objectives. It compensates for individual systems weak-
nesses and establishes an infrastructure and a supportive culture of learning and
empowerment with accountability.
• It is important to ensure that the proper project is selected so that most effec-
tiveness is achieved and resources are best utilized. A new structured model for
project selection and prioritization was introduced, followed by a discussion of
projects classification and the use of VSM. It is recommended for all CI projects
to follow an integrated LSS approach based on the well-known DMAIC
structure where suitable tools are selected based on the nature and goals of the
projects. Also, a high-level framework for LSS CI, project selection and pri-
oritization, and other business blocks was presented (Fig. 3.1).
• Culture change management is an important part of initiative management and is
an essential aspect of MSs focusing on important dimensions, such as proper
alignment and communication to optimize the performance of the organization.
In this book, some keynotes were provided on the effective culture change
management which is a key requirement for the successful deployment of CI
initiatives. In addition, a description was provided of the different culture-related
features and the main practices of ICWMS and other traditional MSs’ practices.
ICWMS establishes a culture of cooperation, innovation, TQ, BE, and CI.
• ICWMS was compared to other QMS and MS models in terms of features and
main practices. ICWMS is more comprehensive and encompasses most aspects
listed under different MS models. ICWMS practices are in alignment with
Deming’s management philosophy and they are more comprehensive than
MBNQA practices. ICWMS practices are different from those of traditional MS
in all dimensions discussed. ICWMS integrates MS, QMS (such as ISO 9000),
quality award models, and CI methodologies. It encourages the use of
self-assessment audits such as MBNQA and EFQM, as they help in achieving a
comprehensive MS. There is a link between ICWMS and other MS models
where QM and CI methodologies such as LSS, QMSs, TQM are encompassed
within ICWMS.
• The two case studies in Appendix D, which are based on the author’s actual
work involvement and implementation at real industries, provide a valuable
reference for researchers and practitioner who consider implementing ICWMS
in other industries. In each case study, several KPIs were used to validate the
theoretical model by comparisons of their statuses prior and after implementa-
tion. In addition, results from the CEO interview at Company A and the
employee survey at Company B were analyzed to test the hypotheses
178 10 Conclusions and Recommendations
concerning the implementation of ICWMS. The results of the implementation in

Company A showed improvements such as the 20% in the BSC KPIs results, the
turning of the financial situation from being non-profitable in the order of
hundreds of thousands of dollars into becoming profitable in the order of mil-
lions of dollars, 67% in regional market share, 21% in gross margin, 20% in
productivity, 13% in customer satisfaction, and 36% in the employee survey
results. Company B showed improvements such as the 23% in the BSC KPIs
results, 15% in the employee survey results, 10% in flexible budget, 30% in the
internal rejects, and 182% in people recordable safety incident rate. The results
clearly imply that ICWMS helps improve the overall business performance,
financial health, productivity, customer and employee satisfaction, strategic
alignment, employee motivation, and rates of improvement. It is important to
note that management commitment, organization effort, culture management,
proper deployment, and communication are key success factors for imple-
menting ICWMS. In sum, it is important to emphasize that the results of these
empirical studies evidently indicate that ICWMS does indeed optimize orga-
nizations performance and that the results obtained can generally be replicated
elsewhere in the future.
10.2 Future Recommendations
The recommendations regarding the topics covered in this book are as follow:
• To present a detailed description of how Six Sigma and TQM can be integrated
together and present that in the form of case studies.
• To develop an extended version of Six Sigma with the consideration of multiple
characteristics since quality is judged based on multiple characteristics in reality
as opposed to a single CTQ characteristic. Also, it would be worthwhile to
analyze the current Six Sigma software packages, such as Minitab, JMP, Crystal
Ball.
• More details can be developed on how the project selection and prioritization
model presented in this book will function in relation to other systems in an
organization.
• Additional studies of the practical implementation of the Kano-based Six Sigma
approach are required to further verify that model. Also, it would be worthwhile
to investigate theoretically and practically the integration of various tools into it.
• More practical studies of the LSS SCM approach are required to further verify
that model. It would also be worthwhile to investigate integrating other tools
into it.
• ICWMS requires further evolution to be more robust and comprehensive. It
needs to be detailed and verified through more practical experiments.
10.2 Future Recommendations 179
• It is suggested to perform more practical case studies to quantitatively verify the

theoretical model regarding culture change or transformation to a total
company-wide quality culture through a comparison of ‘before’ and ‘after’
application status.
• ICWMS needs to be compared to more MSs to help improve it more and more.
• More empirical tests are required to provide further perspective regarding
practical execution problems in other industries with different structures and
cultures or under other circumstances than the two in Appendix D. The
improvement rates are influenced by factors such as the implementation time
interval and the level of success. Thus, various influential factors need to be
considered in the future.
• There is a need for more research into integrating quality, production, inventory,
maintenance, and warranty which will provide an industry with a competitive
edge. This effort needs to utilize Six Sigma and ICWMS, so that the rate of
improvement is maximized and total operation cost is minimized. Also, the joint
selection of process parameters and production run requires further research
because it can affect the defect rate, material cost, scrap or rework cost and
quality loss. Moreover, the development of an integrated model for joint opti-
mization of quality, inventory control and preventive maintenance, as well as the
development of an optimization model for determining economic manufacturing
quantity, optimal warranty cost and period, and optimal selling price for a
product is all worth investigating.
• The future research needs further investigation regarding the types of metrics
used (absolute, weighted, percentages, etc.), the use of BPR versus the use of
incremental CI approach, the differences between implementing Kano-based Six
Sigma approach to design new products versus improve existing products, and
the requirements as well as the challenges to be considered by any company
prior to the implementation of ICWMS such as type of business and organi-
zation structure.
Appendix A
LSS Practical Case Studies
To demonstrate the proposed model in Chap. 4, three studies were actually

conducted.
A.1 Equipment Utilization and Layout Improvement
A.1.1 Define
Problem statement: At Company C (a sawmill), the logs/lumber handling loaders

and the storage area layout have not been evaluated lately in terms of utilization.
The equipment utilization is concerned with the percentage of time the equipment is
performing actual work (not idle) out of the total time in a shift. The actual
workload is estimated by the rate of production in unit/hour multiplied by the cycle
time in hour/unit.
Goal statement: Estimate the loader's utilization at the different plants within the
site. Improve the utilization as well as the storage area layout organization. Also,
decide whether to keep or buy new loaders if more economic or suitable for the job.
Benefits: Direct impact on net revenue and the cash flow and savings of operator
hours by handling same volume with less machine time.
Team members: Champion, manager, Black Belt, process owner, and financial
analyst.
COPQ and baseline performance:
• The average utilization/machine will be calculated in the measure phase based
on data collected through databases and observations.
• Ideal utilization/machine = 100%.
• COPQ = (%100—average utilization/machine) $1,209,537.
• Initial estimated savings = $137,257 (Table A.1).

https://doi.org/10.1007/978-3-319-99034-7
182 Appendix A: LSS Practical Case Studies
Table A.1 Initial estimated saving analysis for the project

Current number of Targeted number of
machines machines
Location First Second First Second
shift shift shift shift
In-feed and out-feed of Plant 1 2 2 2 2
In-feed and out-feed of Plant 3 1 1 0.5 0.5
Total number of operators 9 8
Total number of machines (loaders) 5 5
Sum of annual costs including repairs, fuel, 1,209,537 1,072,280
and labor ($)
Initial estimated financial savings ($) 0 137,257
A.1.2 Measure
Background:
• Prepare a list of the machines in scope, their locations, tasks, schedules, and
costs.
• Prepare a layout diagram showing locations and routes of machines studied.
• Prepare a list showing the frequency of tasks done by each machine (mostly
through historical databases, noting statistical variation).
Observations:
• Perform a time study to capture cycle times of all tasks: primary and secondary.
• Develop a layout for storage areas including frequencies and cycle times.
• Collect data on machines and capacities.
Initial data results: Based on data collected (frequency of trips and time it takes
per trip), the average utilization per machine was estimated to be 69% (note that two
machines work at Plant 1 in-feed). The results are listed in Table A.2.
Continued COPQ and baseline performance measurement:
• Average utilization/machine = 69% (five machines)
• Ideal utilization/machine = 100%
Table A.2 Utilization results

Location Average utilization/machine (%)
In-feed and out-feed of Plant 1 80
Appendix A: LSS Practical Case Studies 183
• COPQ = (%100 − %69) $1,209,537 = $ 374,956

• Initial estimated savings = $137,257 (Table A.1).
A.1.3 Analyze
Comparison of current versus new machine considered for Plant 1: Based on

current vertical reach, eight weeks of inventory require an area of 421,040 squared
ft. Only an area of 280,693 squared ft is required in the case of the new machine.
Benefits also include closer storage to Plant 1 in-feed and reduction in the waste of
material handling. Also, the new machine requires 15% less time to unload raw
materials from trucks.
Layout analysis: The issue of layout organization is analyzed to find out if
improvements can be done. For example, one of the exercises done was to compare
storage locations of two materials (i.e., Materials A and B) which are handled from
the storage areas to the in-feed of Plant 1. It was found that a 21% improvement
(less time needed) can be achieved if the two materials storage places are exchanged
(Table A.3; Fig. A.1).
A.1.4 Improve
Recommendations: Use a new machine with a larger capacity than the two existing
machines at Plant 1 (average is 100% which peaks even higher when running
Material B) provided that another machine (the machine at Plant 3) will help the
machine at Plant 1 by changing some of its practices such as assisting in raw
material unloading from trucks and in changing the storage locations to become
easier for the machine at Plant 1 to handle Material B. This will add about 10%
more utilization to the machine at Plant 3. Also, the schedule for the machine at
Plant 3 will be changed from two shifts to only one shift. However, it will start from
1:00 pm to 10:00 pm so that it overlaps the two regular shift schedules (from 8:00
am to 5:00 pm and from 6:00 pm to 3:00 am) of the machine at Plant 1. Material B
is to be scheduled for those overlapped hours. Finally, the storage areas will be
changed to reduce the waste in material handling time (Table A.3). Improvement
results and estimated costs and savings are summarized in Tables A.4 and A.5
(Total annual realized savings = $179,801).
A.1.5 Control
The new improvements are monitored, and the actual financial savings are
$270,572. Responsibilities are assigned to the process owner to ensure the gains are
maintained. Lessons learned:
Table A.3 An example of layout study results

From To location Material Average time by Frequency/ Time
location material (second)/ shift frequency/
cycle (including shift
empty back trip)
Storage 1 Plant 1 in-feed Material A 123 50 6150
Storage 4 Plant 1 in-feed Material B 219 37 8103
Total 50520
New improved scenario after changing materials storage locations
From To location Material Average time by Frequency/ Time
location material shift Frequency/
(second)/cycle shift
(including back
empty)
Total 39768
% 21%
Improvement
Fig. A.1 Layout improvement before and after switching the storage locations for Material A and
Material B
Table A.4 Improvement anticipated results

Before After Improvement (%)
Number of machines 5 4 20
Number of shifts/week 39 29 26
Number of operators/week 9 8 11
Average % Utilization 69% 84% 22
Total annual costs ($) 1,209,537 1,029,736 15
Machine costs ($/unit of production) 4.7 3.5 26
Industrial engineering tools, teamwork, and involvement are keys for success.
The machines available should always be challenged for suitability for the job.
A.2 Production Line Efficiency Improvement
A.2.1 Define
Problem: The efficiency of the dressed lumber production line at Company D

(a planer mill) has an average of 67% and a standard of deviation of 9.1%. The
efficiency is estimated by the production line uptime multiplied by the lugs (metal
pieces attached to the board-carrying chain) occupancy. The uptime is concerned
with the time the production line is running as a percentage out of the total time in a
shift. The occupancy is concerned with the percentage of filled lugs (by lumber
pieces) out of the total lugs ran in a shift.
Goal: It is believed that the expected average should be at 75% with less
variation.
Benefits: Direct impact on the cash flow, savings of operator hours by producing
same volume with less machine time, and less cost $/production unit.
COPQ:
• Almost ideal efficiency (used to calculate COPQ) = 99%
• Baseline efficiency (based on four months worth of data) = 67%
• Targeted efficiency (used to calculate estimated savings) = 75%
• Estimated COPQ = $343,805 (based on improving from 67 to 99%)
• Initial estimated savings = $111,355 (based on improving from 67 to 75%)
Team members: Champion, manager, production line employees and supervisor
(process owner), Black Belt, electrical and mechanical maintenance supervisors and
accountant.
VOC: Use a SIPOC high-level process diagram.
186
Table A.5 Current versus targeted utilization and estimated saving results
Location Current number Current average Targeted number Targeted average Notes
of machines utilization/machine of machines utilization/machine
First Second (%) First Second (%)
shift shift shift shift
In-feed and 2 2 80 1 1 100 Replaced two small machines by a new
out-feed of one with greater capacity
Plant 1
In-feed and 1 1 80 1 1 80
out-feed of
Plant 2
In-feed and 1 1 36 0.5 0.5 82 Reschedule for one shift overlapping the
out-feed of previous two shifts duration and assign
Plant 3 additional tasks
In-feed and 1 0 71 1 0 71
out-feed of
Plant 4
Total number 9 8
of operators
Total number 5 4
of machines
Sum of annual $1,209,537 $1,029,736
costs
Estimated $179,801
annual
financial
savings
Appendix A: LSS Practical Case Studies
A.2.2 Measure
Basic descriptive statistics: Mean = 0.673, Median = 0.696, Standard

Deviation = 0.092, and Process Capability Index (Cp) = 0.55 (Fig. A.2). Baseline:
Baseline efficiency (based on four months worth of data) = 67% (Fig. A.3).
Brainstorming of potential sources of problems: A cause and effect diagram, a
FMEA, and a Pareto chart (Fig. A.4) were used to identify the following potential
x’s so that they can be analyzed in the next phase: line speed, raw material length
variation, bars (attached to board-carrying chain) downtime, sorting bins downtime,
width changeover, people attitude and communication (two crews), jams downtime
and planer maintenance.
A.2.3 Analyze
The following explains the hypotheses testing of the potential x’s to find critical
ones:
1. The speed of the line was reduced and a hypothesis testing was used to deter-
mine if there was a significant difference between the data ‘before’ and ‘after’
repair. The sample size was 80 days (each day is a sample) for both before
repair and after repair.
Normality test hypotheses are: Ho: Data is Normal and Ha: Data is not normal.
Normality test results: P value = 0.001 ( 0.05); therefore, data is not normal, and
thus, a Mann–Whitney test is used to compare the medians of the two groups of data.
Fig. A.2 Process capability

Fig. A.3 Individual control chart of daily efficiency
Fig. A.4 Pareto chart of downtime (DT) categories
Mann–Whitney test hypotheses are Ho: equal medians and Ha: not equal
medians.
Mann–Whitney test results: P value = 0.0027 ( 0.05). Therefore, medians are
not equal (median before repair = 0.69900 and median after repair = 0.73970).
Also, it can be concluded that the speed of the production line had a significant
impact on the production line efficiency. Slowing down proved to have been a
better approach (to increase throughput) than speeding to a level which
exceeded the line limitations.
2. The raw material length variation was reduced simply by changing the sorts of
the raw material. More sorts were created to allow for a better separation of
lengths (less lengths are combined). Similar to the previous procedure, a nor-
mality test was done which resulted in a P value of 0.028, and thus, a Mann–
Whitney test was conducted which resulted in a P value of 0.05. The sample
sizes were 27 data points for each. Therefore, it can be concluded that the new
sorts had a significant impact on the line efficiency.
3. A new procedure was implemented where more maintenance checks were
conducted on the bars with the goal of improving the efficiency of the line and
decreasing the bars downtime. A normality test resulted in a P value of 0.0, and
thus, a Mann–Whitney test was conducted which resulted in P value of 0.01.
The sample sizes were 80 data points for each. Therefore, it can be concluded
that checking the bars regularly had a significant impact on the bars downtime
and consequently the production line efficiency.
4. New Teflon blocks were installed to minimize the sorting bins downtime.
A normality test resulted in a P value of 0.0, and thus, a Mann–Whitney test was
conducted which resulted in a P value of 0.01. The sample sizes were 32 data points
for each. Therefore, it can be concluded that the new Teflon blocks had a significant
impact on the sorting bins downtime and consequently on the line efficiency.
5. A new procedure for the width changeover process was implemented where a
better coordination between the operators was introduced with the goal of
reducing the downtime. A normality test resulted in a P value of 0.0, and thus, a
Mann–Whitney test was conducted which resulted in P value of 0.05. The
sample sizes were 82 data points for each. Therefore, it can be concluded that
the new procedure had a significant impact on the changeover downtime and
consequently the production line efficiency.
6. To analyze the people attitude, a comparison was conducted between the two
crews of operators who run the production line for shift A and shift B.
A normality test resulted in a P value of 0.44, and thus, a two-sample t-test was
conducted which resulted in P value of 0.03. The sample sizes were 80 data
points for each. Therefore, it can be concluded that the crew working in shift A
achieved a better production line efficiency record when compared to the other
crew. Sharing of best practices and a motivation plan is needed to improve the
performance of the second crew working in shift B.
7. Regarding the jams downtime, it is expected that the change in the raw material
length sorts will allow material to flow much smoothly and reduce the jams.
A normality test resulted in a P value of 0.0, and thus, a Mann–Whitney test was
conducted which resulted in P value of 0.05. The sample sizes were 25 data
points for each. Therefore, the new raw material length sorts had a significant
impact on reducing the jams downtime.
8. A new procedure was implemented where more maintenance checks were
conducted on the planer with the goal of reducing the downtime. A normality
test resulted in a P value of 0.0, and thus, a Mann–Whitney test was conducted
which resulted in P value of 0.05. The sample sizes were 25 data points.
Therefore, more frequent checks of the main machine on the line had a sig-
nificant impact on the line efficiency.
A.2.4 Improve
The tests done in the previous phase had resulted in positive impacts on the line
efficiency, and thus, they are being adopted and fully implemented as part of this
phase. A summary of the improvements is listed as follows:
1. To find the best operating speeds for all of the products, an evolutionary
optimization (EVOP) approach is used which does not severely interfere with
production. The inputs are the production line speed, the raw material length,
and the raw material width. The output or response of interest is the efficiency.
The procedure includes slowing the line down, then increasing the line speed
gradually by 25 ft/min and performing close monitoring of efficiency,
throughput, and downtime. The speeds of the different segments of the line are
adjusted and tacked to find and adopt the best ones.
2. Changing the raw material length sorts proved to improve variation in lengths,
controlling speed since fewer changes are required, stacking efficiency of raw
material and finished product, drying capacity (an increase by 13% which
resulted in additional $87,571 of annualized savings), and flow of product
through the production line.
3. A new procedure of more maintenance checks on the bars was implemented.
This has been proven to have improved the line efficiency and reduced the bars
downtime.
4. New Teflon blocks were installed to minimize the sorting bins downtime, and
they had a significant impact on the sorting bins downtime and the line
efficiency.
5. A new procedure of a better coordination between the operators was introduced
to the width changeover process which improved the line efficiency.
6. Best practices were shared with operators and a motivation plan was imple-
mented to improve the performance in shift B. More coordination between
crews and supervisors is achieved through adopting new meetings and com-
munication tools like visual boards.
7. Jams improved by the change in the raw material sorts allowing a smooth flow.
8. The new procedure which included more maintenance checks on the planer was
implemented after it had been proven to have great impact on production line
efficiency.
A.2.5 Control
Finally, the team improved the efficiency to 75% (Fig. A.4). Stage 1 includes the
baseline where the average efficiency was 67%, Stage 2 is the transient stage, and
Stage 3 includes data after implementing all improvements where the average
efficiency is 75%. Also, the Cp improved from 0.55 to a value of 0.72. Table A.6
shows the control plan which was handed over to the process owner. Initial
Table A.6 Control plan
Line/operation/process Process input or Control Subject goals: Sensor: Frequency of Sample size Location: Who Decision
output subject specification/ measurement measurement where measures rule/corrective
requirement tool or results are action
(USL, LSL, evaluation recorded
target) method
Planer/sizing All board Speed fpm Range 350– Planer speed Once at the Each run Onsite Planer Check the speed
lengths 850/to be indicator beginning of operator
specified by the run
length
Planer/planer All board Speed fpm To be specified Belt speed Ongoing Each run Onsite Grader Check the speed
out-feed/slow belt lengths by run tachometer
Planer/planer All board Speed fpm To be specified Belt speed Ongoing Each run Onsite Grader Check the speed
out-feed/deck#1 and lengths by length tachometer
deck#2
Planer/planer All board Speed To be specified Belt speed Ongoing Each run Onsite Grader Check the speed
out-feed/lugs chain lengths lugs/min by length tachometer
Planer/in-feed All Thickness 0.970–1.300 Caliper digital One board One board Onsite In-feed Give feedback to the
boards/Supplier target 1.000′′ every 30 min with eight operator sawmill team
A measurements
Planer/in-feed All Moisture 8–12% target Moisture meter Ongoing Every run Onsite In-feed Give feed back to the
boards/Supplier 6% operator supervisor
B
Planer/out-feed/sorting Kickers Functionality Reliability Maintenance Weekly All kickers Onsite Maintenance Change corroded ones
bins performance check operator
Planer/out-feed/J bars J bars Alignment Reliability Maintenance Weekly All J bars Onsite Maintenance Change broken ones
chain check operator and align all
Planer/planer line All lumber Efficiency LSL: 74%, target Automated Online Each run Onsite Automated Eliminate assignable
going to the 80% System causes
planer
Planer/planer line All lumber Downtime USL: 46.8 min In-feed and Ongoing Each run Onsite In-feed Eliminate assignable
going to the out-feed sheets operator and causes
planer grader
Planer/planer line All lumber People Less variation Efficiency, Ongoing Each week Onsite Maintenance Eliminate
going to the attitude between the two lug-fill, and supervisor differences/competition
191
planer crews downtime

numbers
estimated savings = $111,355 (based on improving from 67 to 75%) + $87,571

(additional estimated savings due to reductions in drying costs) = $169,643/year.
The actual savings were $168,136.
Lessons learned:
• Statistical tools are helpful to investigate data sets for any differences after
repairs.
• People need to be flexible to change the way processes are done.
• Instilling positive attitude and coordinating between crews are keys for success.
• Additional projects which might result from the main project are of great value.
• Work closely with the team to ensure desired direction and result is achieved.
A.3 Installed Sales Labor Margin Improvement
A.3.1 Define
Labor margin: The profit made on the installation of products sold to customers.
Problem: At Company E (an installer of retail home products), the installed sales
margin on labor is low and has been decreasing lately.
Goal: To increase the margin by 5% to match the good results achieved in 2005.
Team members: Champion, general manager, installed sales supervisors, Black
Belt, process owner, sales employees, and financial analyst. Benefits: A direct
impact on total margin and the cash flow.
• 2006 labor margin (baseline) = 21%
• 2005 labor margin (target) = 26%
• Best-in-class labor margin (COPQ) = 33%
• Current labor sales for 2006 = $3,193,660
• COPQ = $3,193,660 (33 − 21%) = $382,600
• Estimated savings = $3,193,660 (26 − 21%) = $159,683
VOC: Table A.7 shows a high-level SIPOC diagram.
Project management: A major tool used is the Gantt chart of the project
schedule.
A.3.2 Measure
While sales have increased in 2006 compared to the previous years (Fig. A.5), the
labor margin is decreasing. The baseline labor margin (based on twelve months
worth of data) = 21% (Fig. A.6).
Table A.7 SIPOC diagram
S I P O C
Sales associate Customer enters store to buy item Customer inquires or is told about Form is filled out for installed sales Client
installed program
Information taken Fill out install form and send to Form sent to installed sales office Installed sales
install office manager
Installed sales Install form received from sales Log in request and assign to specific Lead has paper trail to track Installed sales
manager floor install staff progress for follow-up person

Installed sales Installed sales person calls client Organize time with client to Figure out details of clients request Client
person estimate job
Figure out labor and product costs Work out total estimate with Print out estimate to give to client
product and labor
Estimate completed and ready to Give estimate to the client Client decides to accept or reject
give to customer install
Job coordinator Customer chooses product Order product or do up sale Invoice created and purchase order Installed sales
done person
Call installer and client Organize time with client to install Date set to install Client
Installer Installer at site Complete installation Job completed
193
Fig. A.5 Labor sales trend
Fig. A.6 Labor margin trend
Brainstorming of potential sources of problems:

A cause and effect diagram and a FMEA (Table A.8) were used to identify the
following potential x’s so that they can be analyzed in the next phase: damaged
product, no follow-up for purchase orders (POs) causing late arrival of products,
wrong measurements, ordered wrong products (sometimes due to the measure sheet
problems), the incomplete quote, damaged customer property, and waiting for
product to arrive and go back to the customer to install. Quick hits identified include
setting up a customer complaint follow-up checklist and a market research to set
sales-margins’ guidelines.
Table A.8 FMEA
Process step Key process input Potential Potential Severity Potential Occurrence Current Detection RPN
failure mode failure effect causes controls
Lead sheet is Customer information Sheet is lost, Lost sale, 5 Wrong 8 None 9 360
filled wrong, or compensation, attitude, lack of
information is rework training
missing
Administrator Sheet information No call is Lost sale 3 Unable to 9 None 9 243
calls customer made reach customer
and fills
information
Sales Create measurement Wrong Lost sale, 7 Poor attention 9 None 9 567
qualifying and sheet, customer and information compensation
contact detailed job

information, decision-
making
Book installer Phone call Forgot to book Lost sale, 3 Lack of 7 None 9 189
installer compensation communication
Installer Measurement sheet Wrong Wrong product 8 Lack of 8 None 9 567
measurements measurement, ordered, wrong experience or
unit issue, price, lost training and
wrong site margin rushing
evaluation
Quote, Fill measurement sheet Time, scope of Lost sale 7 New 10 Turn to 8 560
contract work, no employee, administrator
credit application,
disagreement
Book Contract, method of Wrong Delayed job, 8 Handling, sold 9 None 9 648
installation payment, sales order, product, compensation to someone
and order deposit, PO damaged else, lead time
product product, extended
195
(continued)
Table A.8 (continued)
196
Process step Key process input Potential Potential Severity Potential Occurrence Current Detection RPN
failure mode failure effect causes controls
vendor out of
stock
Pick and store Invoice Wrong Delayed job, 7 Human error, 9 None 9 567
product product, compensation damaged
wrong
quantity, out
of stock
Pick for Invoice Damaged by Delayed job, 8 Rushing, 9 None 9 648
delivery and handling compensation wrong attitude
deliver
Pick for Installation Work order, Damaged 8 Delays, 9 None 9 648
delivery and material product or compensation
deliver property
Pick for Installation Work order, Not on time 5 Delays 10 None 9 450
delivery and material
deliver
A.3.3 Analyze
The initial step in this phase is to prepare for the hypotheses testing for each of the
potential x’s and put a plan for data collection as demonstrated in Table A.9. To
find the critical x’s, a sample was taken from the historical office survey records to
be analyzed. The results are shown in Figs. A.7 and A.8. From Fig. A.7, it can be
seen that ‘damaged product’ and ‘no follow-up on POs’ are not major contributors
for a low labor margin. On the other hand, it can be noticed that ‘wrong mea-
surement,’ ‘ordered wrong,’ ‘incomplete quote,’ ‘damaged customer property,’ and
‘waiting for product to arrive and go back to the customer to install’ are all critical
factors which had a negative impact on the labor margin. They had respectively
scored 11.5, 8.8, 41.5, 7.8, and 10.7% of all of the reasons for discounts on labor
margin. Figure A.7 shows that ‘incomplete quote’ stands out as the greatest reason
for discounting. Figure A.8 shows more details by each department.
A.3.4 Improve
The critical x’s and the quick hits are all investigated for improvements in this
phase. Table A.10 shows the corrective actions to improve the labor margin, and
Table A.11 shows the responsibilities of the team members (was identified as a
quick fix).
A.3.5 Control
At the end of the project, the team succeeded to improve the labor margin to 26.5%.
Table A.12 shows the control plan which was handed over to the process owner to
ensure that gains are maintained. Initial estimated savings = $159,683/year (based
on improving from 21 to 26%). Total savings were $175,651 (based on improving
to 26.5%).
Lessons learned:
• Investigate history of problem and previous attempts to fix it thoroughly.
Table A.9 Data collection and hypotheses information
198
Theories to be List of questions Null Alternative Tools to be Description Sample Where Who will How will
tested (selected that must be hypothesis hypothesis used data type size, to collect data data be
from the C-E answered to test (HO) (HA) number of collect recorded
diagram, each selected samples data
FMECA, theory
and/or FDM)
X1 Damaged What is the We do not We damage Pareto Nominal Minimum Office Job On a
product percentage of damage products occurrence interval 50 survey coordinator check-off
discounts caused products resulting in and dollar sheet survey
by damage? discounts to amount sheet
please
customer
X2 No follow-up How many We We do not Pareto Nominal Minimum Office Job On a
on POs discounts are communicate follow up on occurrence interval 50 survey coordinator check-off
given due to well with our orders and dollar sheet survey
poor vendor vendors resulting in amount sheet
communication? discounts to
please
customer
X3 Wrong What is the We do not We measure Pareto Nominal Minimum Office Job On a
measure percentage of measure wrong and occurrence interval 50 survey coordinator check-off
discounts given wrong discount to and dollar sheet survey
because of please amount sheet
wrong customer
measurement?
X4 Ordered wrong What is the We do not We order Pareto Nominal Minimum Office Job On a
percentage of order wrong wrong product occurrence interval 50 survey coordinator check-off
discounts given product resulting in and dollar sheet survey
due to ordering discounts to amount sheet
the wrong please
product? customer
(continued)
Table A.9 (continued)
Theories to be List of questions Null Alternative Tools to be Description Sample Where Who will How will
tested (selected that must be hypothesis hypothesis used data type size, to collect data data be
from the C-E answered to test (HO) (HA) number of collect recorded
diagram, each selected samples data
FMECA, theory
and/or FDM)
X5 The quote is How often do we We do not We forget to Pareto Nominal Minimum Office Job On a
not complete discount because forget to include some occurrence interval 50 survey coordinator check-off
we did not include things that are and dollar sheet survey
include anything in needed to do amount sheet
everything the quotes the job in the
needed in the quote
quote?
199
Fig. A.7 Pie chart of the dollars spent on discounting the labor margin by reason
Fig. A.8 Pie chart of dollars spent on discounting the labor margin by department
Table A.10 Improvement plan

Type Description Improvement action Due
date
Critical x Wrong measurement Create a standard measuring procedure March
including checklists and standard units 02
Critical x Ordered wrong Sales to double check order March
information once received the supplier 21
confirmation
Critical x Incomplete quote Create a standard quoting procedure April
including checklists and implement 01
Critical x Damaged customer Create and implement procedures for April
property installations and damage claims 15
processes
Critical x Waiting for product to Conduct a Kaizen to create a visual April
arrive and go back to the board of the process from quoting, to 01
customer to install receiving to picking and installing
Quick hit Visibility of margin loss Create a visual board for the key April
performance indicators including 15
margin loss
Quick hit Guidelines and template Initiate a market research of all March
for margins products and packages to set margin 09
targets and rules
Quick hit Customer communication Set up a customer complaint follow-up March
checklist 15
Quick hit Roles and responsibilities Clarify the roles and responsibilities of March
the team members for the process 02
steps
Quick hit Lack of fully functional Suppliers to send extra accessories in March
accessories case some fail 15
Table A.11 Employees’ responsibilities

Order Receive Pick Deliver Install Verify
product product product product product customer
satisfaction
Administrator •
Sales person •
Receiver/picker • •
Delivery •
person
Installer •
202
Table A.12 Control plan

Critical to Unit of Standard Collector Frequency Sample Criteria/action Owner
margin measure
improvement
Create/maintain Margin % Targeted % Install Weekly All Update margin chart, General
performance manager data execute recommended manager
visibility actions
Incomplete Checklists per One checklist for each type of Install Monthly 10 Every file has to have a General
quote file job manager completed checklist per manager
type of job
Ordered wrong Confirmations Confirmations have to be Install Monthly 10 Checked every file after General
in file double checked manager receiving confirmation manager
Measured Measure sheet Every measurement Install Monthly 10 Every file must have General
wrong in file confirmation should be done in manager measures in inches only manager
inches using a blank sheet by confirmed using a blank
installer sheet
Margin Labor Margin Each job’s margin is Install Daily Check Go through a report of General
expectation % measurable and visual manager all exceptions to find manager
communication discrepancies
Appendix B
Kano-Based Six Sigma Case Study
To demonstrate the proposed model in Chap. 5, a generic case study is presented.

This case study uses an example of Company F that buys rough green (wet) lumber
from a sawmill. The lumber is mainly dried and dressed before being delivered to a
retailer. Here are the high-level steps of this DFSS (following DMADV) case study:
a. Define:
1. Understand the VOC and identify customer CTQ characteristics (Table B.1).
b. Measure
2. Use Kano model (Table B.2) to identify and understand customer require-
ments (or use a Kano-based QLF).
c. Analyze
3. Use QFD matrix to translate requirements into technical characteristics. The
Kano factor is used in the calculation of an adjusted degree of importance.
This Kano-adjusted degree of importance method is taking into account
different weighing factors such as Kano factor, sales point, and improvement
ratio (which is based on the target for the customer requirement and the
customer perception of own company as a score). All scores of customer
perception, target, degree of importance, and technical characteristics inter-
relationships are based on customer-focused groups rating on a scale from 1
to 5 points and 1 to 2 points for sales point (as seen in Fig. B.1). The rest of
the columns in Fig. B.1 are based on simple calculations according to the
equations in the headings of the table. The QFD matrix lists the customer and
technical requirements and their rankings. Figure B.2 shows that two cus-
tomer requirements (i.e., specified grade and moisture content) stand for
73.8% of the total of the importance factors. Highest score (drying process)
is the area of focus for the next period of time.

https://doi.org/10.1007/978-3-319-99034-7
204 Appendix B: Kano-Based Six Sigma Case Study
Table B.1 SIPOC and CTQ characteristics

S I P O C CTQ
Sawmill Cut, sorted, Dry Dried Planer mill Properly cut, sorted, and
and stacked bundles stacked bundles. Moisture
bundles of of lumber content and straight
lumber physical shape
Planer mill Dried Dress Dressed Grading Specified thickness and
bundles of lumber station width
lumber pieces
Grading Dressed Grade Graded Trimming Specified grade
station lumber lumber station
pieces pieces
Trimming Graded Trim Trimmed Sorter Specified length
station lumber lumber
pieces pieces
Sorter Trimmed Sort Sorted Packaging Proper sort
lumber lumber station
pieces pieces
Packaging Trimmed Package Packaged Retailer Specified grade,
station lumber bundles dimensions, moisture,
pieces of lumber quantity, and good
packaging
Table B.2 Kano classification of customer requirements

Customer requirement Kano classification Kano factor (K)
Moisture content Must-be 2.0
Specified thickness One-dimensional 1.0
Specified width One-dimensional 1.0
Specified length One-dimensional 1.0
Specified grade Must-be 2.0
Specified quantity Must-be 2.0
Proper sorting Attribute 0.5
Good packaging Attribute 0.5
4. Use the cause and effect diagram and FMEA to understand the problem and start
conceptualizing solutions (or use TRIZ).
i. To further analyze the top issue that resulted from the previous steps (i.e.,
drying process defects), the cause and effect diagram (Fig. B.3) is used to
understand the problem. Table B.3 shows a summary of the results ranking
done by a cross-functional team. Each person was asked to rank the top
eight items and a score was calculated for each item by multiplying the
ranks and dividing the result by the count of ranks. Similarly, FMEA is also
used to understand the potential failure modes at the different steps of the
Appendix B: Kano-Based Six Sigma Case Study 205
Fig. B.1 QFD matrix
Pareto of Customer requirements Kano-adjusted importance degree

100
Kano-adjusted importance degree
100
80 80
60
Percent
60
40 40
20 20
0 0
Customer requirements
ad
e
en
gt
t
h
ti t
y
es
s th er
nt id th
o gr l en u a n ick n W O
d C
ifi
e
re ifi
ed q t h ified
ec is t u ed ied
ec ifi f ec
Sp o S p e c ci Sp
M Sp Sp e
Kano-adjusted importance degree 40.0 32.0 8.0 6.0 4.5 4.0 3.0
Percent 41.0 32.8 8.2 6.2 4.6 4.1 3.1
Cum % 41.0 73.8 82.1 88.2 92.8 96.9 100.0
Fig. B.2 A Pareto of the Kano-adjusted importance degree by customer requirement

Fig. B.3 Cause and effect diagram
Table B.3 Summary of potential causes for drying process defects and their weights
Cause and Effect potential causes Weights
Drying procedure 560
Old kilns 784
High variation between kiln operators 40
Insufficient training of kiln operators 263
Spacing between board and between bundles is not optimal 32
Lumber pieces are too dry on top bundles 9
Lumber is old, broken, and unclean 24
Low quality of the green wet lumber 2
Inaccurate moisture content measurements 1
Bundle size is not optimal 1
process (as in Table B.4). A Risk Priority Number (RPN) is calculated for
every potential failure mode cause which is the result of the multiplication
of severity, occurrence, and detection rates filled by the team. Table B.5
shows a summary of potential sources of problems from these two brain-
storming knowledge tools. The four most important issues to focus on are
old kilns, drying procedure, kiln operator training, and loader operator
training (lumber arrangement and bundle sizes). The major issue of focus is
the old kilns and its FMEA-identified corrective action (the feasibility
study).
Table B.4 FMEA for the drying process
Process Key Potential Potential Severity Potential causes Occurrence Current Detection RPN Action Responsibility Action
step process failure mode failure controls recommendations taken
input effect
Load Green Broken Loss in 3 Operator error 9 Visual 1 27 Loader operator Dry end Plan
lumber wet boards recovery inspection training manager training
bundles lumber and
into the kiln grade
Load Green Wrong Loss in 5 Operator error 9 Visual 1 45 Loader operator Dry end Plan
lumber wet arrangement recovery and variation inspection training manager training
bundles lumber of size and and between
into the kiln spacing grade operators
Dry the Moisture Boards are Loss in 9 Kiln instruments 9 Moisture 1 81 Fix the kiln or Dry end Study
lumber content over-dried recovery failure (old) detector buy a new one manager feasibility
Appendix B: Kano-Based Six Sigma Case Study
and
grade
Dry the Moisture Boards are Loss in 9 Drying 9 Moisture 1 81 Kiln operator Dry end Plan
lumber content over-dried recovery procedure is not detector training manager training
and a best practice
grade
Dry the Moisture Boards are Loss in 9 Kiln failure (old) 1 Moisture 1 9 Fix the kiln or Dry end Study
lumber content very wet recovery detector buy a new one manager feasibility
and
grade
Unload Dry Broken Loss in 3 Operator error 9 Visual 1 27 Loader operator Dry end Plan
lumber lumber boards recovery inspection training manager training
from the and
kiln grade
207
Table B.5 Summary of key potential sources of problems from the knowledge tools
Key potential causes Knowledge tools
FMEA Cause and effect diagram Observations
1 Old kilns • • •
2 Drying procedure • • •
3 Kiln operator training •
4 Loader operator training • •
ii. Conceptualize solutions. The problem of drying process defects can be

considered as a previously well-solved problem. As a follow-up from the
feasibility study identified from the previous step of FMEA, two solutions
are identified regarding drying defects. The first option is to fix the old kiln
and the second is to buy a new more efficient kiln.
5. Choose the best solution using a prioritization matrix or a feasibility study (or
use AHP). The first step done by the team is to establish the criteria, as in
Table B.6. The second step is to list priorities as voted on by the team based on
the data available and the experience of the team members. It is clear from the
comparison in the table that the second alternative (buying a new kiln) is the
better option.
d. Design
7. Improve the chosen concept (buying a new kiln) using FMEA and DOE
once implemented. DOE can help form best procedures, understand the
process, investigate which of the input factors are critically affecting the
output and at what levels. Based on the results from the knowledge tools and
for demonstration purpose, the DOE inputs can be drying procedure (1 or 2),
lumber bundle size (small or large), and lumber arrangement (1 or 2). The
output is the percentage of drying defects. A (23) factorial design can be
selected to study main and interaction effects. Trials are randomized to
reduce the effect of noise factors. Then, the influence of factors and inter-
actions is statistically analyzed and the settings of input parameters are
determined to minimize the drying rejects.
e. Verify
8. Validate the process control elements (Pilot test) and launch the new design.
Table B.6 Simple comparison matrix

Available solutions within industry Factor 1: cost $ Factor 2: efficiency (%)
Fix current old kiln (Contractor A) 190,000 90
Buy a new kiln form (Contractor B) 470,000 99
Priority based on experience and judgment 17% 83
Appendix C
LSS and SCM Case Study
The case study described in this Appendix is a practical example of how LSS
(including VSM as a key tool) can be used to improve a real SC. This case study is
used to demonstrate the proposed model in Chap. 6 and was carried out at a real
industry. It is about Company G, which is a retailer of manufactured home prod-
ucts. It provides more than 50,000 products and serves mainly the North American
market. It employs about 80 people at its main Distribution Centre (DC). This
company started the implementation of Lean, including VSM and JIT, in 2006.
Prior to that, the company had a few Six Sigma projects implemented. This study
includes the application of VSM to the main DC of this company. This empirical
case study is undertaken with the objective of demonstrating the improvements in
the function of the DC, due to the implementation of LSS. Factors chosen are the
receiving period, filling rate of orders from retail stores, picking rate, lead time,
inventory level and inventory turnover, which are used to measure the performance
of the DC. The data required for the case study was obtained from the company
records over a period of about two years. Data was collected from sources that
included purchasing, receiving, sales, and accounting records.
Define
Project: Improvement of the distribution of products.
Problem: The logistics operations at the DC are not efficient enough to meet the
needs of the business in driving more volumes of products through the SC in less
time.
Goal: To improve the efficiency of the distribution system, increase the volume
driven through the SC, reduce costs, reduce the average inventory, increase the
inventory turnover, reduce the lead time, and efficiently supply the stores with their
orders (JIT).
Team members: Champion, manager, buyers’ representatives, suppliers’ repre-
sentatives, stores' representatives, LSS Black Belt, process owner, inventory control
specialists, DC employees, and financial analyst.

https://doi.org/10.1007/978-3-319-99034-7
210 Appendix C: LSS and SCM Case Study
Benefits: A direct impact on the total margin and the cash flow.
• 2006 receiving period (current baseline) = 2 weeks late
• 2007 receiving period (target) = 1 day late
• 2006 filling rate of orders from retailers (current baseline) = 80%
• 2007 filling rate of orders from retailers (target) = 90%
• 2006 picking rate (current baseline) = 39 line picks/operator/hour
• 2007 picking rate (target) = 60 line picks/operator/hour
• 2006 lead time (current baseline) = 62 days
• 2007 lead time (target) = 26 days
• 2006 inventory turnover (current baseline) = 5.51 turns per year
• 2007 inventory turnover (target) = 5.64 turns per year
• Best-in-class inventory turnover (COPQ) = 7.01 turns per year
• Estimated savings = Current inventory average for 2006—Target inventory
average for 2007 = $2,000,000
• COPQ = Current inventory average for 2006—Best-in-class average for
2007 = $19,000,000
Fig. C.1 Current-state VSM exercise (see soft version for better visibility)
Appendix C: LSS and SCM Case Study 211
Measure
To view and to understand the current process, a current-state VSM was used to identify
waste and improve it. The map assisted the team in identifying improvement oppor-
tunities (Fig. C.1). Quick hits included several Kaizen events for implementing visual
workplace across the DC so that any sign for abnormal condition becomes evident.
Analyze
An analysis was performed on the current-state VSM. This included an analysis of
the unnecessary steps and ways to minimize waste within and between steps, an
analysis of the flow of products and information, and an analysis of the lead time,
cycle times, downtime, changeover time, and rework. Then, a future-state VSM was
created to maximize the value-added content and eliminate waste (Fig. C.2).
Improve
An improvement implementation action plan was built to start the implementation
of the recognized improvements (Table C.1). Kaizen events were used to imple-
ment most improvements. Kaizen events varied in durations from one day to ninety
days for a Kaizen project. An example of the actions listed in a Kaizen event is
given in Table C.2.
Fig. C.2 Future-state VSM exercise (see soft version for better visibility)
212
Table C.1 Implementation action plan (Note SKU stands for Stock Keeping Unit)
No. Process step Kaizen event Type Start
1 Receiving Streamline, visual workplace and first-in-first-out setup 2 days 6/1
2 Receiving Visual workplace to identify (and solve) receiving problems 1 days 6/5
3 Receiving Unload, receive, and put away any load within an hr and plan for spikes 1 day 6/5
4 Seasonal receiving Receive and pick products for all stores in a day for small products 30 days 8/1
5 Seasonal receiving Identify seasonal products 1 day 8/1
6 Re-buying Visual workplace 1 day 8/30
7 Re-buying Receive products from vendors weekly 30 days 9/5
8 Re-buying Automatic system for replenishment: set up EDI between the DC and the different 90 days 7/5
stores where the point-of-sale data at the stores is communicated back to the DC to
initiate shipping and to the vendor to initiate replenishment
9 Re-buying Establish control levels for inventory 2 days 6/8
10 Booking Visual workplace 1 day 9/12
11 Booking Set up a plan for inbound loads and receiving requirements 1 day 9/13
12 Booking Investigate same day receipt of trucks and ability to expedite rush loads 1 day 9/14
13 Put away (place a received Visual workplace and first-in-first-out setup 1 day 9/26
product in its designated location)
14 Put away Investigate the replacement of annual inventory by cycle counts 1 day 9/27
15 Inventory control Visual workplace 1 day 9/28
16 Loading Visual workplace 1 day 11/14
17 Loading Maximization of truck load, accuracy of loads, and right sequence of pallets 1 day 11/15
18 Picking (getting the store’s order) Identify proper tools, plan for training and identify requirements for achieving a 100% 1 day 11/28
accuracy
19 Picking Visual workplace 1 day 11/27
20 Invoicing Visual workplace 1 day 12/12
(continued)
Appendix C: LSS and SCM Case Study
Table C.1 (continued)
No. Process step Kaizen event Type Start
21 Shipping Ship everyday to all big stores and twice a week to the other stores. Control the flow of 2 day 7/17
trucks to the stores and set up more frequent deliveries of less quantities to reduce
inventory and steps (rapid replenishment triggered by the customer). Trucks travel
between the stores, suppliers, and the DC in cycles. Ship some products directly from
supplier to store to reduce total lead time. Consistent delivery times
22 Shipping Eliminate paper work. Achieve damage-free deliveries 1 day 7/19
23 Production control Visual indicators, management system, better process on SKU setup 2 days 6/15
24 Release pick Implement 100% radio frequency scanning for picking. Release smaller batches (twice 2 days 8/10
a day/store). 100% stock available for picking at right location
25 All system Document procedures (best practices) 90 days 10/3
213
214
Table C.2 Re-buying Kaizen list

Priority Actions
3 To have the quantity sold by stores to drop into the reportable quantity daily
3 Only the products sold at retail price should be downloaded into the reportable quantity to avoid excess from bulk buys (‘end-caps,’ clearance
items, flyers, seasonal, sale, contractors, etc.)
3 Visual KPI code for downloaded stores sales by SKU in the reported quantity
2 Safety stock should be 1.25 lead time demands (a little bit more for ‘A’ and ‘B’ products) and 1.00 lead time for ‘E’ products
3 Special order codes in the SCM software for orders issued at the store
1 Quarterly ‘end-caps’ and ‘stack-outs’ (seasons) planning meeting for buyers and marketing teams to identify bulk buys and quantity to be
bought in advance
2 Costumer representation at the DC for store inquiries or better communication with stores (a lot time is spent on the phone to answer redundant
questions)
2 Report of non-moving products to enable reaction (once a period)
2 To divide the report by class or section and send it to purchasing
1 Variance reports from the SCM and tracking software must be up to date
1 Standardization for use of activity codes
1 Purchasing team to follow up the purchase orders (POs) initiated centrally
1 Provide a new computer to run reports
1 Provide a scanner for the DC
Appendix C: LSS and SCM Case Study 215
Control
The results were validated and a control plan was designed using mistake-proofing
approach. At the end of the project, the team succeeded to improve the receiving
period to a state of same day receiving using a visual process of a penalty box, the
filling rate of orders from retailers to 94%, and the picking rate to about 70 line
picks/operator/hour. The additional SKUs of material added during the project
made it very difficult to estimate the improvements in lead time, inventory turns,
inventory level and estimated savings, since they varied tremendously. Also, the
manager of the DC stressed that one great benefit of the project was the increase in
the employees’ engagement level.
Appendix D
ICWMS Case Studies
D.1 Introduction
In this appendix, the implementation of ICWMS is illustrated in a practical way

through two empirical case studies, at Company A and Company B. These case
studies were carried out using real industries. They demonstrate and prove quan-
titatively, how effective the ICWMS integration is, through the comparison of both
the pre-application status and the post-application status. This appendix will discuss
the two case studies, including employee survey results in an effort to verify the
theoretical ICWMS model.
The two empirical studies, including the comparative evaluation of ICWMS
effect on the performance of the companies, are significant from a practical system
reengineering and management point of view. They identify suitable approaches
and provide insight into how a company can implement a total company-wide
quality culture as well as a solid infrastructure for managing and improving its
processes. Next, the study hypothesis and prepositions are developed in preparation
for the case studies.
D.2 Hypotheses Development
The reason for developing a set of hypotheses is to refine and focus the study. The
main hypotheses of this study are:
Hypothesis no. 1: The appropriate integration of CI methodologies and MSs into
ICWMS aligns people and operations in the strategic direction to achieve better
financial performance results.

https://doi.org/10.1007/978-3-319-99034-7
218 Appendix D: ICWMS Case Studies
Hypothesis no. 2: The implementation of the ICWMS produces a better produc-

tivity improvement than what is obtained in the same period of time at the same
company when ICWMS is not applied.
customer satisfaction results.
employee satisfaction results.
Hypothesis no. 5: The implementation of the ICWMS achieves better performance
results than what is obtained in the same period of time at the same company when
ICWMS is not applied.
ICWMS establishes a culture of alignment, communication, cooperation, motiva-
tion, CI, trust, engagement, and empowerment.
The first three hypotheses will be mainly tested through BSC KPIs in the two
case studies. Hypotheses no. 4, 5, and 6 will be tested through an interview with the
CEO in the case of Company A and an employee survey in the case of Company B.
The employee survey utilized four prepositions as follows.
D.3 Study Prepositions and Hypotheses Used
The study prepositions (which can be thought of as success factors) and the cor-
responding hypotheses regarding ICWMS model are described as follows:
D.3.1 Preposition A: Alignment
A successful organization should ensure alignment of all people and operations

across the whole business where all individuals participate in strategic management.
Employees should understand the business strategy and how their work contributes
to the strategic goals of the organization. They should be encouraged to work on CI.
Their supervisors should provide them with feedback on their performance and
identify training opportunities for them (Preposition A corresponds to Hypotheses
no. 4 and 6).
D.3.2 Preposition B: Communication
A successful organization should ensure effective communication exists across the

whole business where all individuals are well-informed. Employees should be
provided with timely information about the company and own unit performance
Appendix D: ICWMS Case Studies 219
updates. They should be kept informed about the different challenges faced, cor-
rective actions taken and the achievements and contributions made by the company.
They should be receiving information that helps CI (Preposition B corresponds to
Hypotheses no. 5 and 6).
D.3.3 Preposition C: Leadership
Supervisors should provide employees with performance expectations and the

assistance needed to enable them to do their work. Employees should feel free to
express opinions to their supervisors. Employees should be treated fairly and
respectfully by their supervisors. Supervisors should provide good coaching, listen
to employees concerns, and should ask for their ideas and opinions for CI.
Supervisors should inform employees when they do something good. Supervisors
should inform employees about company challenges, performance, and their career
development plans (Preposition C corresponds to Hypotheses no. 4 and 6).
D.3.4 Preposition D: Motivation
Employees should feel proud of working for the company and good about its future
and their future with it. They should feel good about the amount of work assigned
to them and satisfied with the work conditions and safety. They should receive
sufficient training, be equipped with sufficient resources, and acquire sufficient
knowledge to perform their jobs. They should be working in teams that are involved
in CI. Rules and regulations should not interfere with their jobs (Preposition D
corresponds to Hypotheses no. 5 and 6).
D.4 Case Studies
The case studies were conducted in three phases: model design, implementation,
and evaluation. During the study, validity was pursued by using triangulation and
theory to help maintain the cases under control. The comparison of measurements
of performance (i.e., KPIs) before and after improvements is very important to
objectively assess a change process (Seen et al. 2001). Two case studies, at
Company A and Company B, are used to verify the theoretical model through a
contrast of the scenarios before and after its implementation. BSC KPIs are selected
and monitored, to be used in the benchmarking and comparisons. Also, the index
for measuring the maturity of an organization’s application of all aspects of
ICWMS is audited and the survey results are analyzed to test the above hypotheses.
For proprietary reasons, the names of the two companies and some specifics on the
processes are not mentioned. Notwithstanding, very few details were changed as
not to have the actual facts and experiences misrepresented. According to contin-
gency theory, there is not one single method for business operation, which can be
applied to all situations (Foster 2007). These two case studies validate how helpful
the ICWMS can be to the performance of an organization if properly implemented.
D.4.1 Case Study 1
The first case study is about Company A, which is a Canadian manufacturer of

specific fabricated wood products. The company was established 50 years ago. It is
one of the largest regional producers which serves mainly the North American
market and employs about 150 people. The company started the implementation of
all of the elements of ICWMS, including process reengineering and LSS, in 2004.
Prior to that, the company only had a few Six Sigma projects implemented, but no
formal MS. As part of the implementation of ICWMS, various changes were
actually introduced to the company which included using cross-functional teams for
strategic planning, conducting benchmarking studies, developing strategic initia-
tives, using quality project management approach, establishing new communication
plans and daily meetings, using visual management, using a five-tier process
documentation and standardization framework, using LSS and BPR, and using a
quality performance management approach with focus on training. In addition to
manufacturing processes, this empirical study also includes the application of
ICWMS to transactional or service-providing processes, such as purchasing and
warrantee. Factors chosen are the BSC KPIs since they are used to measure the
performance of the company. The data required for the validation was obtained
from the company records over a period of about four years. Data was collected
from sources that included production records, sales records, and accounting.
The BSC has KPIs which are listed under four categories: financial, customer,
process, and people. Each KPI has a weight of points that add up to the total 200 points
of the BSC. Achieving the baseline performance, which is the same as last year
performance for a KPI, gets the company a score of half the points assigned to that
KPI. Achieving the target score for the current year gets a company three quarters of
the total points and achieving the stretch goal set by the company gets it the full points.
The second row of Table D.1 shows the rates of improvement for two reporting
periods (i.e., 2004–2005 and 2006–2007). It clearly shows that the rate of improve-
ment (which is calculated from the total BSC results of one year compared to the past
year) significantly increased after the implementation of ICWMS started. More
particularly, in 2006 and 2007, the company started exceeding its targeted perfor-
mance for the year (score is > 150 points). Also, Table D.1 (rows 3–8) lists some
actual results provided by the company’s CEO. These outstanding results were
accomplished after the implementation of ICWMS. It shows a snapshot of the actual
values before and after the deployment (i.e., 2004 baseline and the end of 2007).
These items were selected to demonstrate effectiveness of ICWMS since they were
outstanding. A key indicator for self-assessment against competition is measuring the
rate of improvement or rate of change.
Table D.1 Comparison of measures results before and after the implementation of ICWMS and
which hypotheses they support (Company A)
Measures Data sources Before After Support
hypothesis
Rate of BSC overall 31% (the 56%(the average Hypothesis
improvement score average for for 2006 and 2007 no. 5
above last year 2004 and is 156/200)
2005 is
131/200)
Financial CEO interview Losing Making money in Hypothesis
standing money in the the order of no. 1
order of millions of dollars
hundreds of
thousands of
dollars
Productivity CEO interview Baseline 20% improvement Hypothesis
no. 2
On-time delivery CEO interview 26% 98% Hypothesis
no. 3
Customer CEO interview 60% 96% Hypothesis
satisfaction no. 3
Employee survey CEO interview 55% 71% Hypotheses
for motivation no. 4 and 6
Employee CEO interview 30% 7% Hypotheses
turnover no. 4 and 6
Return on BSC (absolute) 83% 87% (i.e., 4% Hypothesis
investment improvement) no. 1
Gross margin % BSC (absolute) 83% 100% (i.e., 21% Hypothesis
improvement) no. 1
Regional market BSC (absolute) 45% 75% (i.e., 67% Hypotheses
share improvement) no. 3 and 5
Customer BSC (absolute) 75% 85% (i.e., 13% Hypothesis
satisfaction improvement) no. 3
Fleet utilization BSC (absolute) 65% 85% (i.e., Hypothesis
31% improvement) no. 5
Turnover— BSC (absolute) 0% 90% Hypotheses
indirect no. 4 and 6
employees
Employee survey BSC (absolute) 37% 50% (i.e., 36% Hypotheses
results improvement) no. 4 and 6
% score achieved BSC (absolute) 56% 82% (i.e., 46% Hypothesis
out of the total improvement) no. 5
weighted average
(only for the
seven KPIs
above)
In general, the weights assigned to each individual KPI may change from one
year to the next as well as some KPIs may be deleted or replaced. On the other
hand, for a comparison to be more accurate from one year to another, it is suggested
to use a weighted average for each parameter for all of the years within the com-
parison period (four years in the present case). This results in an absolute com-
parison as opposed to a customary comparison of the year-by-year rate of
improvement based on a different weight for each year. Additionally, in the present
case some BSC KPIs were not collected for every year. Hence, the ones with
missing data were taken off the comparison (Table D.1, rows 9–16). Some data was
not available for other KPIs in some years due to the fact that some KPIs were
removed from the list as new KPIs got introduced. As a result, only seven KPIs are
listed, as they all had data available for the listed years. These KPIs were tracked
since the start of ICWMS implementation in 2004 and in the next three years. The
summaries of their results are listed in the table.
Table D.1 (rows 9–16) shows a percentage improvement in the average
weighted score for 2004 and 2005 (before and during the start of implementation)
compared to the average weighted scores for 2006 and 2007 (after implementation).
It is also important to note that if a KPI had a score of 5.0 out of 10.0 points for a
year, its percentage improvement above the previous year is 0% since the mid-score
is the same as the score for the previous year. A score of 7.5 is equivalent to 50%
improvement and so on.
It is obvious from the data in general in Table D.1 that major changes and
improvements were achieved once the new system was implemented. For example,
the financial situation of the company turned from being non-profitable in the order
of hundreds of thousands of dollars into becoming profitable in the order of millions
of dollars while the regional market share improved by 67% despite the fact that
the market demand decreased by about 14% over the same period (Canada
Mortgage and Housing Corporation, 2009; National Association of Home Builders,
2009). In addition, tremendous cost reduction was realized which can be seen
through the 21% improvement in gross margin and the 20% improvement in
productivity. Also, it is important to note that there was a 13% improvement in
customer satisfaction and a 36% improvement in the employee survey results.
In addition, ICWMS implementation was assessed through regular audits con-
ducted by supervisors and validated by CI heads. The interval between each
measurement point and the next one is about four weeks (i.e., a total of thirteen per
year). Figure D.1 shows a graphical representation of a summary of audit scores
improvement through the different years. The actual score is an average for each of
the scores of the five components of ICWMS for different departments. The score
was audited in September of 2005 and evaluated at 1.0 out of 5.0. The year 2006
witnessed huge improvement of the score, which reached 3.9 in September of that
year. In July of 2008, the score reached 4.6. Thus, all elements of ICWMS were
effective in the implementation.
Fig. D.1 ICWMS audit score results
D.4.1.1 Hypotheses Testing
Although factor analysis could not be used to support the hypotheses due to lack of
detailed data, the hypotheses are supported by the KPIs scores provided by the
company’s CEO interview and the BSC results obtained from the records of
Company A. As shown in Table D.1 (column 5), the results indicate a strong
evidence of positive changes in Company A which support accepting the six
proposed hypotheses.
As seen from the results, it can be concluded that the overall performance of the
company very much improved. The fact that there was a lot of waste in the existing
system also helped in enabling the new system to be widely accepted and even-
tually successful. The management team was keen on trying new approaches and
the successes affected all employees and caused a chain reaction. Successes in
departments that implemented the system turned its employees into preachers of the
new approach, who made other employees in other departments very anxious to
implement it.
D.4.2 Case Study 2
The second case study described in this appendix was conducted at Company B,
which is a Canadian manufacturer of paper products. Company B is also one of the
largest regional producers, which mainly serves the North American market. The
company employs about 105 people and all of them were involved in some form of
new improvement initiatives (68 of them participated in at least one major trans-
formation event and half of them chose to participate again). In 2004, the company
created a position for an improvement coordinator. In 2005, the company was

introduced to ICWMS. Then in mid-2006, the company resumed communication
about ICWMS and later that year, assessments and auditing of ICWMS score were
initiated. Thus, the implementation started in 2005 and the benefits were starting to
be realized in 2006. In 2007, more efforts were spent on building ICWMS culture of
alignment and improvement through employee involvement, training, improvement
projects, improvement events, and cooperation. In January 2007, the company
planned extensive training and building of a personal improvement culture, major
Kaizen events and linking of ICWMS to critical issues and business planning. The
company introduced White Belt training to include people at the shop floor and train
them on ICWMS and CI tools. Thus, the whole company was prepared to adapt to
the requirements of ICWMS, without forcing ICWMS into the company or people.
The deployment process also included training of the management team. The
business experience of the deployment leaders was a key asset through the imple-
mentation. The circumstances were helpful as people were willing to try the new
system in hope for a major improvement and change from the inferior circumstances
they were experiencing. As part of the implementation of ICWMS, various changes
were actually introduced to the company which included using cross-functional
teams for strategic planning, conducting benchmarking studies, developing strategic
initiatives, using quality project management approach, establishing new commu-
nication plans and daily meetings, using visual management, using a five-tier pro-
cess documentation and standardization framework, using LSS and BPR, and using
a quality performance management approach with focus on training.
BSC data was obtained from different accounting and production records.
The BSC for Company B has a similar scoring scheme as the one explained for
Company A. Table D.2 shows the BSC results for seven years, including the
milestones and rates of improvement. It clearly shows that the rate of improvement
(which is calculated from the total BSC results of one year compared to the past
year) significantly increased after the implementation of ICWMS started. More
particularly, in 2006, 2007, and 2008, the company started exceeding its targeted
performance for every year (score is > 150 points). The overall score for 2004,
prior to the implementation of ICWMS, was 128/200 points, whereas the score for
2008, after implementing ICWMS, was 178/200 points.
In general, the weights assigned to each individual KPI may change from one
year to the next and some KPIs may be deleted or replaced. On the other hand, for a
comparison to be more accurate from one year to another, it is suggested to use a
weighted average for all of the years within the comparison period (four years in the
present case). This results in an absolute comparison as opposed to the customary
comparison of the year-by-year rate of improvement based on a different weight for
each year. As it was the case for the first case study, some KPIs were not collected
for every year. Therefore, as it was done before, the KPIs with missing data were
taken off the comparison to allow for the desired absolute comparison (Table D.3).
As a result, only five KPIs in the two reporting periods (i.e., 2004–2005 and 2006–
2007) were listed as these years had data available for these KPIs. It is obvious from
the data in Table D.3 that major changes and improvements were achieved once the
Table D.2 BSC results achieved at Company B out of 200 points (Note All data for 2008 are as
of September 6, 2008)
Year Mile stones BSC Improvement rate
result above previous
out of year (%)
200
Before 2002 Management and supervisors changes 114 14
2003 Production line rebuilt 76 −24
Starting 2004 Improvement and ICWMS coordinator 128 28
assigned
2005 Started implementation of ICWMS 139 39
After 2006 ICWMS culture deployment and 163 63
communication. Started realizing gains
2007 Continued ICWMS deployment at all 161 61
levels through training, Kaizen events,
CI integration, business planning, etc.
2008 Continued ICWMS deployment 178 78
including CI
Table D.3 Comparison of the BSC absolute results for same KPIs before and after the
implementation of ICWMS and which hypotheses they support (Company B)
Measures Before After Improvement Support hypothesis
(%) (%) (after implemen-
tation compared
to before) (%)
% of flexible budget 86 95 10 Hypothesis no. 1
Total suspended 58 75 30 Hypothesis no. 5
solids
Production line 90 100 11 Hypotheses no. 3 and 5
in-house rejects
Production/operating 77 79 3 Hypothesis no. 2
day
People recordable 26 73 182 Hypotheses no. 4 and 5
safety incident rate
Total BSC Score 66 82 23 Hypothesis no. 5
new system was implemented. For instance, the % of flexible budget improved by
10%, in-house rejects improved by 30% whereas people recordable safety incident
rate improved by 182%.
D.4.2.1 Employee Survey
To present an additional understanding of the effect of ICWMS on a company and

its employees, this case study utilized a quantitative research method. This method
used data collected through self-administered questionnaire survey studies, in

addition to the archived records of KPIs. These questionnaires were filled by both
hourly and staff employees and were believed to be more appropriate than other
forms of surveys, such as face-to-face interviews due to the associated costs. These
employee surveys were conducted to assess total alignment, leadership, commu-
nication, and motivation. Each of these categories or survey sections had a list of
several related questions or items ranging from three to eight items (i.e., three items
in alignment, five items in communication, eight items in leadership, and eight
items in motivation). The respondents were asked to rate the agreement level for
each item. There are a total of 24 questions or items. The questions are in the
common five-level Likert scale format. One of the main purposes for this survey is
to evaluate the type of environment and culture the employees are encompassed by
at Company B. The formats of a typical five-level Likert item are (1) strongly
disagree, (2) disagree, (3) neither agree nor disagree, (4) agree, and (5) strongly
agree.
In this case study, the coverage of the proposed survey to the studied matter has
been validated by the author. It is evident from the data presented in Table D.4 that
the four survey sections demonstrated an improvement in the employees’ evalua-
Table D.4 Summary of detailed survey measures and which hypothesis they support (Company B)
Items 2004 (%) 2007 (%) Improvement Support hypothesis
(%)
I receive regular 47 81 73 Hypotheses no. 4 and 6
performance feedback
I know the business 84 85 2 Hypotheses no. 4 and 6
strategies and KPIs very
well
I have got sufficient 47 65 38 Hypotheses no. 4 and 6
training to improve my
skills and do my job
Total alignment score 59 77 30 Hypotheses no. 4 and 6
I receive regular feedback 88 91 4 Hypothesis no. 6
on company and own unit
performance
Company communication 71 70 −1
is effective and I receive
timely business updates
and information
I receive updates on 49 66 35 Hypothesis no. 6
company contributions to
the community
The business information I 59 60 1 Hypothesis no. 5
receive assists me and my
team to continuously
improve
(continued)
Table D.4 (continued)

(%)
I receive regular updates 63 63 0
about the challenges facing
the company and the
actions taken
Total communication 66 70 6 Hypotheses no. 5 and 6
score
My manager always 65 83 26 Hypothesis no. 6
communicates my
expected performance
level
Members of my team are 45 81 81 Hypotheses no. 4 and 6
treated fairly
My manager regularly 67 80 19 Hypotheses no. 4 and 6
supports and assists me to
do a better job
My manager regularly 61 72 18 Hypotheses no. 4 and 6
encourages me to offer
ideas or suggestions
My manager pays 69 80 15 Hypotheses no. 4 and 6
attention to my concerns
and problems
I am satisfied with the 73 89 21 Hypotheses no. 4 and 6
respect I receive from my
manager
My manager provides a 57 79 38 Hypotheses no. 4 and 6
positive role model
My manager recognizes 71 75 5
me when I do a good job
Total leadership score 64 80 25 Hypotheses no. 4 and 6
I am proud to say that I 78 71 −8
work for the company
I comfortably believe the 84 88 5 Hypothesis no. 6
company has an exciting
future
I am contented with the 74 77 4 Hypothesis no. 6
training and resources I
got to do my job
I am satisfied with the 59 62 6 Hypothesis no. 6
amount of work I am
expected to do
There is a good team spirit 71 86 21 Hypothesis no. 6
among employees at the
company
(continued)
Table D.4 (continued)

(%)
Safety procedures are a 82 83 1 Hypothesis no. 6
common company practice
My team is committed to 61 70 14 Hypotheses no. 5 and 6
excellence and CI
I am contented with my 77 77 0
working conditions
Total motivation score 73 77 5 Hypotheses no. 5 and 6
Average for all 66 76 15 Hypotheses 4, 5 and 6
Total employees 106 97
Participants in survey 49 80
Participation ratio 46 82
Note The first column items were adapted from (Human Resources Development Council 1992;
Stat Pac 1997; Peter Barron Stark Companies 2004)
tion, from 2004 to 2007. However, it is worth noting that the survey has limitations
due to participants’ subjectivity, participation rates, and turnover. Overall, the
average evaluation score increased by 15% pointing toward a quite meaningful and
favorable response which reveals another evident indication of the ICWMS
effectiveness.
D.4.2.2 Hypotheses Testing
Although detailed factor analysis could not be performed to support the hypotheses
due to lack of detailed data (except for the case of statistically testing the means of
the employee survey results), the hypotheses are supported by the scores provided
by the company employee survey and the BSC KPIs results. As shown in
Tables D.3 and D.4, the results indicate a strong evidence of positive changes in
Company B which support the acceptance of the six proposed hypotheses (23%
improvement in the BSC KPIs results and 15% improvement in the employee
survey results). Also, Table D.4 shows the detailed employee survey studies results
of a survey done in 2004 before the implementation of ICWMS and the same done
in 2007 after the implementation.
The first column of the table shows a list of 24 items distributed in four sections
(i.e., alignment, communication, leadership, and motivation), as adapted from
(Human Resources Development Council 1992; Stat Pac 1997; Peter Barron Stark
Companies 2004). The table clearly shows that every item of the list of 24 has
improved with the exception of only two items that demonstrated some declining
result. This, however, is countered by the positive results of multiple other items
within the same sections which demonstrated greater improvements where the
overall results show 15% improvement for all survey items. Moreover, the 24
Table D.5 Paired t-test results for means of 2004 and 2007 survey results (by Minitab)
N Mean Standard of deviation Standard error mean
2004 24 0.6675 0.1239 0.0253
2007 24 0.7642 0.09 0.0184
Differences 24 −0.0967 0.1087 0.0222
95% upper bound for mean difference: −0.0587
T-test of mean difference = 0 (versus < 0): T value = −4.36, P value = 0.000
survey items or data points of 2004 were compared to the 24 data points of 2007 to
investigate if the means of the 2007 survey results were significantly greater than
those for 2004 or not for the same questions (paired). Normality tests of the 2004
and 2007 means were conducted respectively using Minitab and the results indi-
cated that there was not enough statistical evidence to reject the null hypothesis (Ho:
data is normal) versus the alternative hypothesis (Ha: data is not normal) since the P
value in each case was greater than 0.05 (i.e., 0.7 and 0.5, respectively). Then, a
paired t-test was used to compare the differences between the two means of 2004
means and 2007 means. The data provided sufficient statistical evidence to reject
the null hypothesis (Ho: µ1 = µ2) in favor of the alternative hypothesis (Ha:
µ1 < µ2) and indicate that the mean of the means of 2007 is greater than the one for
2004 since the P value was less than 0.05. This is another indication of the
effectiveness of the implementation of ICWMS (Table D.5). Also, a box plot of the
difference between the means provides visual evidence of the same result
(Fig. D.2).
Boxplot of Differences
(with Ho and 95% t-confidence interval for the mean)
_
X
Ho
-0.4 -0.3 -0.2 -0.1 0.0

Differences
Fig. D.2 Box plot for the differences between means of 2004 and 2007 survey results
Table D.6 ICWMS audit score result

ICWMS component End of 2006 Quarter 1 2007 Quarter 2 2007
Strategic management 4.33 4.33 5.00
Daily management 3.00 3.00 3.00
Initiative management 2.60 5.00 5.00
Process management 2.00 2.00 2.33
Performance management 2.83 2.83 4.00
ICWMS total score out of 5 points 2.95 3.43 3.87
Furthermore, the implementation of the ICWMS was assessed through regular

audits. The interval between each measurement point and the next one is about
thirteen weeks (i.e., a total of four observations per year). Table D.6 presents a
summary of the audit scores improvement through three different years. These
audits or reports were filled by department managers and inspected by the CI head
to ensure validity. The score was first audited in 2005 and evaluated at a baseline of
1.0 point out of 5.0. The year 2006 witnessed huge improvement of the score,
which reached 2.95 at the end of that year. The elements of ICWMS which were
most effective in the implementation were the strategic, initiative, and performance
MSs (Table D.6).
D.5 Conclusions
The two case studies provide a valuable reference for researchers and practitioner
who consider implementing the ICWMS in other industries.1 In each case study,
several KPIs were used to validate the theoretical model by comparisons of their
statuses prior and after implementation. In addition, results from the CEO interview
in the case of Company A and the employee survey in the case of Company B were
analyzed to test the hypotheses concerning the implementation of ICWMS. The
evidence from these studies strongly suggests that ICWMS helps optimize the
business performance, productivity, cost, customer satisfaction, alignment,
employee motivation, and improvement rates.
The results of the implementation in Company A showed improvements such as
the 20% in the BSC KPIs results, the turning of the financial situation from being
non-profitable in the order of hundreds of thousands of dollars into becoming
profitable in the order of millions of dollars, 67% in regional market share, 21% in
gross margin, 20% in productivity, 13% in customer satisfaction, and 36% in the
employee survey results. Company B showed improvements such as the 23% in the
1
Appendix D is mainly prepared based on our published work: Salah, S., Rahim, A., and
Carretero, J.A. (2011) Total Company-Wide Management System (TCWMS): Case Studies,
Journal of Industrial Technology, Vol. 26, No. 2, pp. 1–14.
BSC KPIs results, 15% in the employee survey results, 10% in flexible budget, 30%
in the internal rejects, and 182% in people recordable safety incident rate.
The use of only two case studies is a limitation. However, the studies can be
more reliable and less biased by the use of more experiments in other industries to
provide further perspective regarding practical execution problems. The assumption
that ICWMS will solve all industrial problems, wherever they are, is also a limi-
tation since it may not hold at another organization under different implementation
challenges in terms of structure, culture, circumstances, influential factors, etc.
However, this system requires and helps culture change and spreads a culture of
innovation and flexibility. It is important to note that the management commitment,
communication, organization effort and cooperation, culture management, proper
deployment, and strong leadership are key factors for successful implementation.
Also, an equal effort should be spent on the people to transform the culture and not
only on CI projects.
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Index
A Cost controls, 11, 20

American Society for Quality (ASQ), 66, 70, Cost-Of-Poor-Quality (COPQ), 8, 12, 58, 66,
71 67, 71, 73, 75, 76, 84, 86, 101, 109, 136,
Analysis of Variance (ANOVA), 73 181, 185, 192, 210
Analytic Hierarchy Process (AHP), 97, 99, Cost-Of-Quality (COQ), 10–12, 27, 42
101, 102, 176, 208 Critical Customer Requirements (CCR), 109
Assignable Causes, 191 Critical-to-Quality (CTQ), 8, 54, 58, 60, 62, 64,
Australian Business Excellence Award 71, 74, 101, 137, 139, 178, 203
(ABEA), 167 Customer demand, 21, 26, 56, 60, 108, 137
Australian Quality Award (AQA), 167 Customer needs, 15, 17, 18, 20–22, 58, 95, 96,
101–103
B Customer Relationship Management (CRM),
Balanced Score Card (BSC), 130, 131, 136, 25, 117
148, 149, 153, 155–158, 169, 177, Customer requirement, 8, 16, 17, 21, 22, 29,
218–225, 228, 230 30, 71, 77, 99, 101–103, 169, 176, 203,
Business Excellence (BE), 31, 76, 107, 127, 205
171 Customer satisfaction, 3, 9, 11, 15, 16, 18,
Business Excellence Model (BEM), 31, 136, 21–23, 39, 41, 44, 59, 60, 68, 77, 81, 83,
167 84, 96, 97, 99, 103, 105, 109, 110, 116,
120, 122, 135, 136, 147, 155–157, 168,
C 176, 177, 201, 218, 221, 222, 230
Canada Award for Excellence (CAE), 167 Customers behavior, 13
Company-Wide Quality Control (CWQC), 19,
26–29, 83, 128, 117 D
Continuous Improvement (CI), 3, 68, 76, 84, Decision-making, 18, 30, 143, 168, 169, 195
85, 109, 110, 142 Defects Per Million Opportunities (DPMO), 8,
Control charts, 9, 71, 74, 102, 188 72, 136, 139
Control plan, 21, 72, 74, 75, 137, 190, 191, Define, Measure, Analyze, Design and Verify
197, 215 (DMADV), 8, 41, 54, 61, 96, 100, 102,
Control variables, 28 103, 109, 203
Corporate Executive Officer (CEO), 43, 61, 116, Define, Measure, Analyze, Enable and Verify
155, 157, 177, 218, 220, 221, 223, 230 (DMAEV), 109

https://doi.org/10.1007/978-3-319-99034-7
234 Index
Define, Measure, Analyze, Improve and 149–159, 165–167, 169–172, 175–179,

Control (DMAIC), 7, 8, 41, 43, 49, 217, 218, 220–222, 224, 225, 228, 230,
51–56, 58, 60, 67–71, 75, 76, 79, 83, 84, 231
86, 108–110, 139, 175–177 International Motor Vehicle Program (IMVP),
Deming’s 14-points for management, 165, 166, 10, 58, 81
171 International Organization for Standardization
Deming’s PDCA cycle, 24, 30, 84, 103, 152, (ISO), 30, 31, 40, 53, 96, 106, 117, 120,
153, 158 122, 131, 145, 153, 165, 167, 177
Design For Six Sigma (DFSS), 8, 41, 61, 66, Inventory control, 25, 179, 209, 212
77, 78, 80, 96, 99, 100, 102, 103, 109, Inventory costs, 108
175, 203 Inventory management, 23
Design Of Experiments (DOE), 62, 74, 97, 102 Inventory reduction, 23, 67, 105
Design optimization, 20, 28
Distribution Centre (DC), 109, 209 J
Just In Time (JIT), 10, 25, 105, 107, 108, 132,
E 209
Economic growth, 81, 96
Economic manufacturing quantity, 179 K
Economic Production Quantity (EPQ), 108 Kano approach, 99
Efficiency, 3, 9, 15, 19, 22, 25, 27, 53, 60, 67, Kano-based QLF, 97, 99, 101
75, 105, 108, 116, 137, 148, 185, Kano-based Six Sigma, 5, 95, 97, 102, 103,
187–190, 208, 209 175, 178
Electronic Data Interchange (EDI), 106 Kano evaluation template, 17
Enterprise Resource Planning (ERP), 25 Kano factor (K), 99, 101, 204
European Foundation for Quality Model Kano model, 3, 4, 15–18, 29, 87, 95, 97,
(EFQM), 31, 119, 136, 166, 167, 177 99–102, 175, 176, 203
Evolutionary Optimization (EVOP), 190 Key Performance Indicator (KPI), 25, 31, 60,
Excess inventory, 11 83, 84, 109, 131, 139, 144, 148, 150,
155–159, 169, 177, 214, 218–226, 228,
F 230, 231
Failure Mode and Effect Analysis (FMEA), 73, Key Process Input Variables (KPIV), 73, 74,
74, 97, 99, 101, 102, 136, 176, 187, 194, 101
195, 204, 207, 208 Key Process Output Variables (KPOV), 74
G L
General Electric (GE), 7 Lean Six Sigma (LSS), 4, 5, 30, 51, 53–59, 62,
Global optimization, 26 63, 66, 68–72, 75–86, 103, 105, 107,
109, 110, 115, 117, 120, 121, 131,
H 137–139, 146, 147, 155, 156, 158,
House Of Quality (HOQ), 21, 101 169–171, 175–178, 181, 209, 220, 224
Human Resources Management (HRM), 31, Lean Six Sigma Light (LSSL), 53
44, 117, 120, 149, 166 Linear, 12, 15, 28, 98
Lower Specification Limit (LSL), 18, 191
I
Identify, Design, Optimize and Verify (IDOV), M
8 Maintenance, 11, 172, 178
Imperfect production process, 108 Maintenance checks, 189, 190
Innovation, 13–15, 22, 57, 66, 76–83, 85, 86, Maintenance process, 150
95–97, 103, 118, 120, 121, 141, 142, Malcolm Baldrige National Quality Award
157, 167, 170–172, 176, 177, 231 (MBNQA), 31, 117, 119, 120, 136, 146,
Integrated Company-Wide Management 158, 165–167, 169, 171, 176, 177
System (ICWMS), 3, 4, 116, 120, 123, Management System (MS), 9, 26, 30, 31, 110,
127–131, 133, 141–143, 145, 146, 115, 116, 119, 145, 217
Index 235
Massachusetts Institute of Technology (MIT), Q

10 Quality Control (QC), 22, 26, 27
Mass production, 60 Quality Function Deployment (QFD), 3, 4, 17,
Measurement System Analysis (MSA), 62, 73, 20–22, 28, 29, 41, 71, 79, 87, 95, 97, 99,
74 102, 131, 169, 175, 176, 203
Quality Improvement (QI), 9, 11, 58, 106, 119
N Quality Loss Function (QLF), 3, 4, 12, 18–20,
National Institute of Standards and Technology 28, 29, 97, 98, 102, 175, 176, 203
(NIST), 10 Quality Management (QM), 4, 9, 21, 31, 57,
National Quality Institute (NQI), 167 105–108, 110, 115–117, 120–122, 128,
129, 131, 146, 151, 155, 158, 165, 171
O Quality Management System (QMS), 9, 31
Operational excellence, 9, 40, 44, 57, 131, 155 Quality System (QS), 5
Operational levels, 25
Operational performance, 43, 105 R
Operational results, 31 Reliability, 11, 14, 21, 73, 97, 106, 191
Operation costs, 67, 83, 179 Resources optimization, 3, 4, 176
Operation quality management, 128, 143, Risk Priority Number (RPN), 195, 206, 207
176
Operations management, 23, 44 S
Operation systems, 127 Single-Minute-Exchange-of-Dies (SMED), 74
Optimal integrated JIT inventory policy, 108 Sort, Set in order, Shine, Standardize and
Optimal quality, 3, 116 Sustain (5S), 62, 72, 74
Optimal warranty cost, 179 Statistical Process Control (SPC), 27
Optimization, 29, 53, 60, 115, 116, 122, 128, Stock Keeping Unit (SKU), 212, 213, 215
137, 176 Strategic alignment, 3, 4, 115, 117, 122, 127,
Organizational excellence, 9, 146 166, 171, 172, 175, 178
Strengths, Weaknesses, Opportunities and
P Threats (SWOT), 130, 153, 169
Plan-Do-Check-Act (PDCA), 8, 9, 24, 30, 41, Sub-optimal process improvement, 55, 56, 75
84, 103, 143, 153, 158 Supplier-Input-Process-Output-Customer
Policy deployment, 60, 66, 119, 120, 131, 132 (SIPOC), 62, 71, 72, 97, 101, 185, 192,
Policy deployment matrix, 131 204
Policy deployment system, 137 Supply Chain (SC), 3, 22, 25, 95, 105
Political, Economic, Social and Technological Supply Chain Management (SCM), 3–5,
(PEST), 130 22–25, 55, 103, 105–110, 127, 166,
Preventive maintenance, 179 176, 178, 214
Process management, 9, 117, 118, 128, 129,
142, 144–147, 149, 150, 152, 153, 155, T
167, 170, 171, 176, 230 Taguchi’s three models, 20, 98
Process optimization, 167 Theory of Inventive Problem Solving (TIPS or
Production control, 22, 213 TRIZ), 97
Production costs, 108 Total Productive Maintenance (TPM), 71, 72,
Production environment, 57 74, 75
Production line, 75, 158, 185, 188–190, 225 Total Quality (TQ), 26
Production line efficiency, 185, 188–190 Total Quality Control (TQC), 27, 120
Production procedures, 67 Total Quality Management (TQM), 3, 4, 9, 20,
Production process, 57, 61, 108 31, 39–45, 57, 86, 105, 107, 116, 119,
Production system, 52, 108, 119 120, 122, 130, 131, 134, 143–146, 149,
Purchase Order (PO), 194, 214 152, 167, 171, 175–178
236 Index
Toyota Production System (TPS), 10 Visual inspection, 207

Traditional Six Sigma (TSS), 52 Voice-Of-the-Customer (VOC), 15, 27–29, 58,
60, 71, 72, 96, 97, 101, 102, 109, 137,
U 175, 185, 192, 203
Upper Specification Limit (USL), 18, 20, 28,
191 W
Warranty costs, 19, 179
V
Value Stream Mapping (VSM), 53, 55, 56, 58,
60–64, 66–73, 75, 79, 85, 86, 106–110,
137–139, 147, 176, 177, 209, 211

An Integrated Company-Wide Management System: Souraj Salah Abdur Rahim

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An Integrated Company-Wide Management System: Souraj Salah Abdur Rahim

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Souraj Salah · Abdur Rahim

ISBN 978-3-319-99033-0 ISBN 978-3-319-99034-7 (eBook)

Library of Congress Control Number: 2018950965

© Springer Nature Switzerland AG 2019

To my parents late Azizur Rahman and

Dubai, UAE Souraj Salah

Part I Introduction and Literature Review

Part II Enhancement of the Six Sigma Methodology

4 The Integration of Six Sigma and Lean . . . . . . . . . . . . . . . . . . . . . 49

Part III Integrated Company-Wide Management System (ICWMS)

8 Integrated Company-Wide Management System (ICWMS) . . . . . . 127

Dr. Souraj Salah received his B.Sc. in mechanical

trained by the Juran Institute, Lead Advisors, Alignment

Dr. Abdur Rahim is a Professor of Quantitative

control which were published by Kluwer Academic

5S Sort, Set in order, Shine, Standardize, and Sustain

FMEA Failure Mode and Effect Analysis

TQM Total Quality Management

Fig. 2.1 Tangible, intangible, and integrated COQ

Fig. 7.1 Examples of a company that uses a structured MS

Table 2.1 Kano evaluation template (Matzler and Hinterhuber 1998) . . . 17

Industries are continuously facing a ﬁerce competition and a global challenge of

1.1 Introduction and Motivation

© Springer Nature Switzerland AG 2019 3

1.2 Objectives and Contributions

The objectives of this book are:

1.3 Book Organization

Abstract This chapter provides a comprehensive literature review of various

2.1 Six Sigma Improvement Methodology

© Springer Nature Switzerland AG 2019 7

2.1.1 Design for Six Sigma (DFSS)

2.2 Quality Management (QM)

Quality Management (QM) encompasses Quality Improvement (QI) which is about

2.3 Total Quality Management (TQM)

2.4 Lean Improvement Methodology

2.5 Quality Costs

The concept of Cost-Of-Quality (COQ) was developed based on the works by

2. Appraisal costs include costs of measuring and auditing of products to ensure

Fig. 2.1 Tangible, intangible, and integrated COQ (Teeravaraprug 2004)

• Innovation is the intentional introduction of signiﬁcantly beneﬁcial ideas, pro-

A. An Innovation Process Model under steady-state conditions (repeated, contin-

2.7 Kano Model

Fig. 2.2 Kano model (Magnusson et al. 2003)

Fig. 2.3 Customer

b. One-dimensional attributes (proportional): The existence of these attributes

c. Attractive attributes (value-adding): The addition of these attributes delights

Table 2.1 Kano evaluation template (Matzler and Hinterhuber 1998)

mathematical computation and the relevant information can be easily obtained

2.8 Quality Loss Function (QLF)

Quality of products and processes is a critical success factor in manufacturing. The

Lð yÞ ¼ 0 if USL y LSL; R otherwise ð2:1Þ

Fig. 2.4 Step-loss and

there might be a slight difference in a characteristic between an accepted product

L ¼ k ð yÞ2 if smaller the better ð2:2Þ

L ¼ k=ð yÞ2 if larger the better ð2:3Þ

L ¼ k ðy  T Þ2 if nominal the best ð2:4Þ

c, d shows Taguchi’s three models. For the smaller-the-better type, as Taguchi

2.9 Quality Function Deployment (QFD)

QFD is a communication tool and a QM and planning approach. It is based on

Fig. 2.5 An example of a HOQ as adapted from (Shen et al. 2000)

Fig. 2.6 A Japanese

2.10 Supply Chain Management (SCM)

Fig. 2.7 Integrated SC entities and stages (Antony et al. 2006)

L ¼ k ðy T Þ2 if nominal the best ð2:4Þ